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Open letter to the WTO member countries on TRIPS and access to health care technology

On the eve of last year's WTO Ministerial Conference in Seattle, Medicins Sans Frontieres, Health Action International and Consumer Project on Tchnology issued the following open letter to members of the multilateral trade body urging the latter to consider initiating moves, both within and beyond the framework of the TRIPS Agreement, to promote equitable access to health care. While no follow-up thereto was forthcoming from the Ministerial, which ended in collapse, the proposals in the letter remain as relevant as ever, emphasising as they do the centrality of upholding public interest in framing international trade regulations on essential health care goods.


16 November 1999

Dear member of the WTO,

WE are writing to express our views on the future discussions at the WTO on issues relating to health care technologies. We form a coalition of health professionals working in developing countries, public health advocates and consumer groups and health and development NGOs. We wish to draw your attention to issues in the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) that relate to access to health care technology.

Unnecessary barriers to access to essential medical products will lead to an increase of preventable illness and death, particularly in developing countries. In our view international trade regulation of essential health care goods merits a new approach in which public interest is the key motive rather than commercial interest.

In May 1999, after more than a year of debate, the World Health Assembly unanimously enacted resolution WHA52.19, calling upon member states:
(1) to reaffirm their commitment to developing, implementing and monitoring national drug policies and to taking all necessary concrete measures in order to ensure equitable access to essential drugs;
(2) to ensure that public health interests are paramount in pharmaceutical and health policies;
(3) to explore and review their options under relevant international agreements, including trade agreements, to safeguard access to essential drugs.

Public health considerations in trade policy

The World Health Assembly resolution signals the beginning of a much-needed dialogue among governments, international organisations, NGOs and industry regarding trade agreements and health care technologies. The resolution gives the WHO a new mandate to monitor the health implications of trade agreements and provide assistance to countries in implementing trade regulation while protecting public health. Indeed, there are signs that support for greater sensitivity to public health considerations in trade is gaining momentum. For example, over the past six months, high officials from the WHO, UNAIDS, the World Bank, and several national governments have expressed support for the use of compulsory licensing of patents to address the global HIV/AIDS crisis. There are several international discussions taking place regarding the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to determine if and how the TRIPS might be changed or interpreted to ensure that public considerations are indeed paramount in trade policy.

Our recommendations to the WTO member countries are to consider several possible actions at the Seattle Ministerial meeting. The proposals reflect different strategies or tactics, address both narrow and broad issues, and include proposals for changes in the TRIPS as well as issues that can be addressed within the implementation of the existing agreements. They are as follows:

(i) Regarding alternatives to TRIPS:

1) Begin discussions on a new paradigm for TRIPS on the issues of health care technologies. This new paradigm should focus on and promote health care research and equitable access to health care.

We propose to begin discussions on new approaches to the TRIPS for health care technologies, that would replace the current emphasis on the protection of private commercial rights with a system obligating countries to support essential medical research and development that addresses public health needs. This new approach should ensure accessibility of these new technologies for those who need them.

The alternative to the TRIPS should include a system for global sharing of the research burden related to a country's stage of development and ability to pay and should ensure equitable access to the results of the research.

We ask that the WHO, the World Bank, the World Intellectual Property Organisation, the WTO, the United Nations Conference on Trade and Development and other appropriate international organisations, interested national governments and public health and trade experts meet with public interest NGOs to discuss this proposal in the coming year.

(ii) Within the context of the current TRIPS framework:

1) Explore expansion of the transitional period for TRIPS implementation in developing and least developed countries until mechanisms to remedy the effects on access to essential health technologies are in place.

2) Give full support to WTO members to implement the TRIPS requirements in national legislation that gives the highest possible priority to protecting the public interest and to remedying abuses of the monopoly by the patent holder.

The objectives and principles outlined in Articles 7 and 8 of the TRIPS agreement provide a strong public interest framework for the interpretation and implementation of intellectual property rights. Article 7 sets out the need to balance intellectual property rights protection with the promotion of technological innovation and the transfer and dissemination of technology 'in a manner conducive to social and economic welfare'. Article 8 outlines the rights of members to adopt measures to protect public health, to prevent abuse of the intellectual property rights and to prevent the obstruction of international technology transfer, provided that these measures are consistent with the provisions of the TRIPS.

Developing countries in particular should be actively encouraged to use this framework to the fullest.

3) Support discussions on proposals to exempt essential drugs from certain TRIPS obligations.

The WHO published the first Essential Drugs List (EDL) in 1977. This list was defined by the WHO as 'those [drugs] that satisfy the health needs of the majority of the population [that] should therefore be available at all times in adequate amounts and in the appropriate dosage form.' It is important to note that the inclusion criteria for the WHO's EDL are not only safety and efficacy, but also economic considerations, specifically the price of the products. Many drugs that are considered essential from a therapeutic or public health point of view are not included, because of their high cost. (Only extremely limited use of HIV/AIDS drugs for the prevention of mother-to-child HIV transmission during birth is included, despite the fact that approximately 30 million persons infected with HIV/AIDS will die in the next decade without access to AIDS drugs.) Thus, it is useful to appreciate that the EDL itself is dependent upon the prices of drugs, and the prices are related to the intellectual property rules applied to those drugs.

4) Support discussions on the issue of patent exceptions for medical research. In this respect, ask the WHO to request comments from the academic and commercial research community on the barriers to medical research presented by current intellectual property regimes, and to advise the WTO on the issue of the legitimate interests of third parties in medical research.

It will also be important to provide the WTO with strong statements in favour of so-called 'bolar' type patent exceptions that are used in the United States, Canada, Israel and some other countries to permit generic drug companies to perform tests on bioequivalence and other issues on patented drugs in order to prepare applications for regulatory approval as generic drugs when the patent expires. Again, countries and international organisations like the WHO can provide a record to support the legitimacy of such patent exceptions, emphasising the public health benefits of generic drug competition.

5) Avoid restrictive and anti-competitive interpretations of country obligations under Article 39 of the TRIPS, concerning health registration data.

Article 39 of the TRIPS is a little debated and little understood provision that requires WTO members to protect health registration data from disclosure or unfair commercial use. Some have argued that if a country requires the use of scientific data to register a pharmaceutical product for sale, the TRIPS requires countries to provide some level of exclusivity for that data, including restrictions on the ability to rely upon the data to register a competing product. In bilateral trade actions, the US government has argued that countries are obligated by the TRIPS to prevent generic drug companies from even relying upon published scientific papers or foreign government regulatory approvals, without permission from the 'owners' of the data that the papers or approvals were based upon.

In the absence of data exclusivity, generic drugs or drugs produced under a compulsory licence can be introduced into the market on the basis of simple bioequivalence tests, without having to replicate time-consuming and expensive clinical trials that are used to establish the efficacy and safety of the products. But if countries are required by the WTO to adopt excessive protection for data exclusivity, there will be problems with providing marketing authorisation for generic products and drugs produced under a compulsory licence using existing registration data.

At present, several countries, including the US and the members of the EU, provide several years of data exclusivity, for purposes of regulatory approval of pharmaceuticals. There are proposals from public health groups to replace current US and EU rules on data exclusivity with new rules that curb abuses such as the Taxol (Paclitaxel) case. (Paclitaxel is a treatment for breast and ovarian cancer, and for Kaposi Sarcoma. Paclitaxel was invented by scientists employed by the US government, and sold as Taxol by Bristol-Myers Squibb. BMS uses its exclusive rights to US government-sponsored research to claim marketing exclusivity under national laws that provide Article 39 type protections of health registration data. BMS receives in excess of $1.2 billion annually for Taxol, and sponsored none of the clinical trials on which initial registration of the drug was based. The high prices charged by BMS for Taxol have led to serious access problems for patients suffering from malignant diseases.) Some proposals would include requirements that companies make public disclosures of the actual costs of clinical trials and other data they seek to protect from 'unfair commercial use,' and that protections be reasonably related to the actual investment costs.

The actual impact of Article 39 on competition and access to drugs is quite unclear, because the language in the Article is not precise regarding country obligations. The WTO interpretations of country obligations will be critical. There is a need to examine the empirical evidence and economic analysis used to support various national policies regarding exclusive rights to health registration data, as well as the historical justification given for such policies. The WHO should provide the WTO with a report on the least-trade-restrictive policies with regard to protection of such data, and accept public comment on anti-competitive aspects of current national regimes, including the 10-year period used in the European Union, that was initially introduced to compensate for the lack of patent protection in Spain and Portugal. By providing the WTO with a communication on the need to avoid excessive and anti-competitive levels of data exclusivity, countries can help set a pro-public health agenda on this issue.

6) Ask the WHO to issue a report to the WTO on the issue of patent exceptions under Article 30 of the TRIPS, as they relate to the export of products to countries that issue compulsory licences. This is a very important issue for those countries that do not have sufficient domestic markets to make domestic production of pharmaceutical drugs feasible, but that could benefit from the import of a product under a compulsory licence. For example, a country such as India with a population of one billion can support a sophisticated domestic pharmaceutical industry, but smaller economies such as Botswana or Nicaragua cannot. It makes no sense at all to have a global trading system that would permit China, Brazil, India, Argentina, Germany, the United States, Japan and other large domestic markets to benefit from compulsory licensing, while smaller market countries cannot. Moreover, it is economically inefficient to limit national procurement of pharmaceutical products to domestic suppliers alone. In our opinion, in their national legislation, a country can currently provide an exception in patent laws for products that are manufactured for sale in a foreign market where the foreign market has issued a TRIPS-compliant compulsory licence. We believe the exporting country's issuance of a compulsory licence protects the legitimate interests of the patent owner. However, it would be extremely useful to request a report from the WHO to the WTO on this issue, both to reduce uncertainty and to influence any possible future WTO jurisprudence on this issue. (To provide a context for this issue, consider the case of fluconazole, a drug used to treat cryptococcol meningitis, a disease that afflicts many people living with HIV/AIDS. Fluconazole sells for $14-25 per daily dose in markets where Pfizer has market exclusivity, but can be acquired for $0.75 per daily dose or less in countries where there is generic competition. The difference in price is a matter of life or death for hundreds of thousands of people with HIV/AIDS.)

The Article 31 provisions in the TRIPS say that in most cases, compulsory licences should be used predominantly for the domestic market, and some companies have indicated they will ask that countries not be permitted to export products produced under a compulsory licence. While we believe such exports would be appropriate and permitted under the TRIPS Article 30 regarding exceptions, when the export market has a TRIPS-compliant compulsory licence in place, this is certainly an area that would benefit from discussion and clarification, particularly given the public interest in fairness and efficiency.

7) Trademark rights and public health. The WTO should request a report from the WHO on the issue of public health perspectives on trademark policy. The WTO should clarify that TRIPS would not prevent a country from requiring certain packaging and labelling requirements in areas where the regulation is to promote public health. This is particularly important for the implementation of generic drug policies. The WTO should make it much clearer that the TRIPS should not be used to prevent governments to require the use of generic names of drugs on product packaging, in prescribing practices, or in generic substitution policies by pharmacies and health care providers.

8) Declare that WTO member countries should not use unilateral trade pressures to prevent national governments from using compulsory licensing of patents or other policies to meet the country obligations to protect public health interests. Indeed, we strongly support agreements that would prevent trade sanctions against countries that do not implement obligations beyond that required by the TRIPS on policies that concern access to medicines.

We hope that you will consider the issues raised in this letter as you prepare for the discussions at the WTO Ministerial Conference in Seattle.

Sincerely,

Dr Bernard Pecoul, Director, Access to Essential Medicines Project, Medecins Sans Frontieres
Dr K. Balasubramaniam, Health Action International
James Love, Director, Consumer Project on Technology

Medecins Sans Frontieres is the world's largest independent medical relief organisation, providing care to victims of war, disasters and epidemics in 80 countries world-wide. MSF was awarded the 1999 Nobel Peace Prize.
  
Health Action International is a network of more than 200 consumer, health, development action and other public interest groups involved in health and pharmaceutical issues world-wide.
   
Consumer Project on Technology is a US-based non-profit research and advocacy organisation created by consumer advocate Ralph Nader. Its activities focus on information technologies, intellectual property and research and development.

 


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