TWN Info Service on WTO Issues (May03/5)
Third World Network
29 May 2003
Dear friends and colleagues
WHO adopts resolution on IPRs and public health after wrangling over text
WHO Member states met at the Fifty-Sixth World Health Assembly in Geneva on May 19-28. At the final plenary, they adopted, among others, a resolution that provides a mandate for the WHO to help countries develop pharmaceutical and health policies, and regulatory measures that can “mitigate the negative impact” of trade agreements.
The text of the resolution had been subject to much consultation and negotiation between Member states before its eventual adoption. Developing countries and
NGOs had been pressing for a resolution that would provide a clear mandate for the WHO to assess the implications of TRIPS, as well as bilateral and regional agreements, on public health and innovation. The US had opposed this, as well as a number of other proposals put forward, including one for the establishment of an independent commission, similar to the UK Commission on Intellectual Property Rights (whose 2002 report had been critical of the TRIPS Agreement and WIPO’s efforts at harmonization of IPR standards at higher levels).
The resolution that was finally adopted contains a compromise text for the establishment a “time-limited body” to undertake analysis of issues related to IPRs, innovation and public health, including on appropriate funding and incentive mechanisms for the creation of new medicines and other products against diseases that affect developing countries. This body is to make concrete proposals on these issues to the WHO by January 2005.
Please find below a report of the discussions at the WHA. The WHA resolution on IPRs, innovation and public health is also attached below.
We hope this is of use.
With best wishes,
Third World Network
WHO ASSEMBLY ADOPTS RESOLUTION ON IPRS AND PUBLIC HEALTH
Third World Network Report
by Cecilia Oh, Geneva, 29 May 2003
WHO Member states meeting at the World Health Assembly (May 19-28, 2003) in Geneva adopted a resolution on Intellectual Property Rights, Innovation and Public Health, directing the WHO Director-General to establish a “time-limited” body that would study and make concrete proposals on the question of appropriate funding and incentive mechanisms to promote the creation of new medicines for diseases affecting developing countries.
The resolution also asks the WHO to cooperate with Member states to develop “pharmaceutical and health policies and regulatory measures” to “mitigate the negative impacts” of international trade agreements.
Other operative parts of the resolution include references to the WTO TRIPS Agreement, in which Member states were urged to “use to the full the flexibilities contained in the TRIPS Agreement” in their national laws. The resolution also called on governments to agree on a “consensus solution” for
Paragraph 6 of the Doha Declaration on TRIPS and Public Health before the Fifth WTO Ministerial Conference in September this year.
(The Paragraph 6 problem refers to the inability of many developing countries to effectively use compulsory licences to obtain affordable medicines from domestic generic drug producers, since the majority of the developing countries do not have domestic manufacturing capacity in pharmaceutical products. WTO Members have not been able to agree on the solution for this contentious issue, even though the end of 2002 deadline set in the Doha Declaration has passed.)
The compromise text of the resolution was adopted only after prolonged consultations and negotiations, primarily between the US, Brazil and a number of African countries. Developed countries, in particular the US, had not been in favour of a strong mandate for the WHO to address IPR issues. Developing countries, on the other hand, had been pressing for a clearer mandate to permit the WHO to properly assess the public health implications of tightened IPR protection, as a result of obligations under the TRIPS Agreement, as well as regional and bilateral trade agreements.
WHO report on IPRs, innovation and public health
The resolution was in response to the WHO report on intellectual property rights, innovation and public health. The WHO report had highlighted concerns about the impact of intellectual property rights on prices of medicines. The report noted that when “intellectual property rights were used beyond the original intent of stimulating innovation, as a commercial tool that overly restricts competition”, the cost to society, particularly in developing countries, would be high.
According to the report, whilst a range of mechanisms (e.g., relaxed patent requirements, tiered pricing, voluntary licensing, compulsory licensing, bulk purchasing and corporate donations) may be employed to achieve the most favourable pricing for patented medicines in developing countries, analysis suggest that “those approaches which facilitate competition have the greatest impact on reducing price”. This would imply that measures like relaxing patent requirements, compulsory licensing would be more effective in lowering cost than tiered pricing or corporate donations.
The WHO report also raised concerns over the extending scope of patents and the adverse effects on future innovation, noting that “(I)n some circumstances, intellectual property rights might have a perverse effect on innovation”. Much would depend on the stage of product development at which protection is applied, and what is admissible as an invention. The report said it was unclear whether extending scope of patents to include “mechanisms of action, uses, and other features of a pharmaceutical product” would promote or hinder innovation in the long run. In addition, the report pointed out that “protection of research data from use by potential generic competitors” might have competition-limiting effects.
Although cautiously worded, the WHO report sounded a warning on the implications of high standards of intellectual property rights on access to medicines, citing studies predicting price increases of two-fold or more as a result of the full implementation of the TRIPS Agreement. It also raised the question of how poor countries could best manage intellectual property systems, given that “the resource implications for a developing country of putting in place the structure needed to implement TRIPS are likely to be significant”. The report further noted that bilateral and regional trade agreements that extract TRIPS-plus obligations from developing countries “may fail to reflect the need for special treatment for health-related products”.
Doing away with Doha - US proposal
The US had been first in putting forward its proposal for the resolution. Asserting that strengthened IP protection was the best way to stimulate investments in research and development, the US proposal requested the WHO to refer Member states to the WTO and WIPO for assistance on development of national technology and innovation strategies, which would include effective systems for intellectual property rights that respond to “public policy objectives, inter alia compliance with TRIPS requirements and the flexibilities therein”. It further requested the D-G to “promote innovation in the field of public health by encouraging respect for strong intellectual property rights”.
The proposal was criticized by NGOs for its non-reference to the Doha Declaration on TRIPS and Public Health. A joint statement issued by public health, development and humanitarian groups including MSF, Oxfam, Health Gap, the Peoples’ Health Movement and Health Action International, urged WHO Member states to reject the proposal.
“The proposals contained in this draft are based on an almost blind belief in the IP system, without regard for the reality for patients in desperate need for newer, more effective health technologies and access to existing essential medicines”, said the NGO statement. In addition, the NGOs were critical of the fact that the US proposal had made no mention of the Doha Declaration on the TRIPS Agreement and Public Health, which had re-affirmed developing countries’ right, among others, to interpret the TRIPS Agreement in a manner supportive of public health and promotion of access to medicines for all. The Doha Declaration had also confirmed that developing countries were able to use, to their full, safeguards against exclusive patent rights, such as compulsory licences and parallel imports.
“It is incomprehensible that the proposal makes no reference to the WTO Ministerial Declaration on the TRIPS Agreement and Public Health (the Doha Declaration), no reference to the need to find an economically viable, workable solution to the Paragraph 6 (production for export) problem that will, consistent with the Doha Declaration, ensure access to medicines for all”, the NGOs said.
The US proposal did not find much favour with the developing countries, either. (Indeed, it was a cause for some snickering in the WHA when the joke went around that the US had finally managed to find a co-sponsor for its proposal - the new government of Iraq.)
Counter proposal - from developing countries
A counter to the US proposal was initiated by Brazil, which was later co-sponsored by Bolivia, Ecuador, Indonesia, Peru, Venezuela and South Africa, on behalf of the Members of the WHO African Region.
The developing country proposal sought to highlight the developing country concerns, urging Member states to “adapt national laws to accommodate the provisions considered in TRIPS Agreement”. It also urged countries to adapt their laws to accommodate those provisions related to Paragraph 6 of the Doha Declaration, whilst maintaining efforts to reach a consensus solution for Paragraph 6 at the WTO. It was understood that this referred to the call for developing countries to adopt national legal measures that would permit the production and export generic versions of patented medicines, including the use of the Article 30 exception under the TRIPS Agreement.
The proposal also asked the WHO to establish an independent commission to collect data and proposals, and “to provide analysis and diagnosis of the relationship between intellectual property rights, public goods, innovation and public health”. The proposal would have the commission provide, on the basis of its analysis and diagnosis, concrete proposals for action to the WHO’s Executive Board by January 2005.
It is understood that the developing countries had wanted an international commission, along similar lines as that of the UK Commission on Intellectual Property Rights (CIPR). The CIPR report had warned against the adverse effects on innovation and access to medicines as a result of TRIPS implementation and had also been critical of efforts at the WIPO to harmonize IPR standards at higher levels.
In addition, the developing country proposal requests the D-G to “collaborate with Member states in monitoring and analyzing the pharmaceutical and public health implications of bilateral and regional trade agreements” (both existing and future ones) so as to be able to “evaluate whether the implications differ from those of existing multilateral agreements”.
The Brazilian proposal eventually became the basis on which a compromise text was drawn up, when it became clear that the US proposal would not get much support.
An informal drafting group, comprising the Brazilian, US and a number of African delegations, could be seen at the coffee lounge, intensely negotiating over the controversial aspects. After last-minute negotiations in a working group, the draft resolution was adopted by the delegates in the Committee to be submitted for final adoption at the plenary.
NGOs and health activists expressed some disappointment with the final text of the resolution. They felt that the earlier proposals put forward by developing countries had been weakened or deleted altogether due to the hard-line stance adopted by the US delegation during the negotiations, which prevented stronger language on a number of key concerns for the developing countries.
These included the compromise struck on the establishment of the independent commission, which had now became “an appropriate time-limited body” for which terms of reference had still be established. There were concerns that there would be further attempts to limit the mandate of the body through the process of establishing its terms of reference.
In light of the concerns and questions raised in the WHO report, NGOs and health activists at the WHA said that there was a need for an independent body that could examine the issues and provide clear proposals for action.
Another issue had been the call for WHO to assess the implications of bilateral and regional trade agreements, in which developing countries are often required to adopt TRIPS-plus obligations. Observers pointed out that the WHO report had also identified the need for assessment of such agreements. The paragraph had now been changed to one that asked the WHO to cooperate with Member states, at their request, to develop “pharmaceutical and health policies and regulatory measures” to “mitigate the negative impacts” of international trade agreements.
NGOs said they were also disappointed that a text proposal from the Chinese, which would have the WHO Member states re-affirm the primacy of health interests over trade ones, as well as include references to the difficulties of developing countries making effective use of compulsory licensing in accordance with the Doha Declaration, had not been included. China had also proposed that Member states should be able “to relax, when necessary, patent requirements in order to meet the needs of developing countries for basic drugs”.
A number of the developing country delegates said it had been a difficult negotiation, but thought the resolution should be seen as a first step to pave the way for more coherent work by the WHO on the IPRs and public health issue.
Agenda Item 14.9
Intellectual property rights, innovation and public health
The Fifty-sixth World Health Assembly,
Having considered the report on intellectual property rights, innovation and public health;
Considering that available data indicates that of some 1400 new products developed by the pharmaceutical industry between 1975 and 1999, only 13 were for tropical diseases and three were for tuberculosis;
Aware that the developed countries represent nearly 90% of global pharmaceutical sales, whereas of the 14 million global deaths due to infectious diseases, 90% occur in the developing countries;
Concerned about the insufficient research and development in so-called “neglected diseases” and “poverty-related diseases”, and noting that research and development in the pharmaceutical sector must address public health needs and not only potential market gains;
Mindful of concerns about the current patent protection system, especially as regards access to medicines in developing countries;
Recalling that, in accordance with the Declaration on the TRIPS Agreement and Public Health (Doha Declaration), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) does not and should not prevent Members from taking measures to protect public health and, in particular, to promote access to medicines for all;
Noting that the TRIPS Agreement contains flexibilities and that in order to use them adequately, Member States need to adapt national patent legislation;
Reaffirming resolution WHA52.19 on the revised drug strategy, resolution WHA54.11 on WHO medicines strategy and resolution WHA55.14 on ensuring accessibility of essential medicines;
Considering that Member States should urge the pharmaceutical industry to reinvigorate its efforts to develop innovations that add real therapeutic advantage in treating the world’s major killer diseases, especially in developing countries;
Recognizing the importance of intellectual property rights in fostering research and development in innovative medicines and the important role played by intellectual property with regard to the development of essential medicines;
Taking into account that in order to tackle new public health problems with international impact, such as the emergence of severe acute respiratory syndrome (SARS), access to new medicines with potential therapeutic effect, and health innovations and discoveries should be universally available without discrimination;
Further considering the continuing efforts of WTO Members to reach a solution for paragraph 6 of the Doha Declaration which recognizes that “WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement”;
Reasserting the need to accomplish target 7 of Millennium Development Goal 6 and target 17 of Millennium Development Goal 8;
Noting resolutions 2001/33 and 2003/29 of the Commission on Human Rights on access to medicines in the context of pandemics such as HIV/AIDS,
1. URGES Member States:
(1) to reaffirm that public health interests are paramount in both pharmaceutical and health policies;
(2) to consider, whenever necessary, adapting national legislation in order to use to the full the flexibilities contained in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);
(3) to maintain efforts aimed at reaching, within WTO and before the Fifth WTO Ministerial Conference, a consensus solution for paragraph 6 of the Doha Declaration, with a view to meeting the needs of the developing countries;
(4) to seek to establish conditions conducive to research and development that spur the development of new medicines for diseases that affect developing countries;
2. REQUESTS the Director-General:
(1) to continue to support Member States in the exchange and transfer of technology and research findings, according high priority to access to antiretroviral drugs to combat HIV/AIDS and medicines to control tuberculosis, malaria and other major health problems, in the context of paragraph 7 of the Doha Declaration which promotes and encourages technology transfer;
(2) by the time of the 113th session of the Executive Board (January 2004), to establish the terms of reference for an appropriate time-limited body to collect data and proposals from the different actors involved and produce an analysis of intellectual property rights, innovation, and public health, including the question of appropriate funding and incentive mechanisms for the creation of new medicines and other products against diseases that disproportionately affect developing countries, and to submit a progress report to the Fifty-seventh World Health Assembly and a final report with concrete proposals to the Executive Board at its 115th session (January 2005);
(3) to cooperate with Member States, at their request, and with international organizations in monitoring and analysing the pharmaceutical and public health implications of relevant international agreements, including trade agreements, so that Member States can effectively assess and subsequently develop pharmaceutical and health policies and regulatory measures that address their concerns and priorities, and are able to maximize the positive and mitigate the negative impact of those agreements;
(4) to encourage developed countries to make renewed commitments to investing in biomedical and behavioural research, including, where possible, appropriate research with developing country partners.