TWN Info Service on Health Issues (Apr11/04)
25 April 2011
Third World Network

"Milestone" virus/benefit-sharing agreement with shortcomings
Published in SUNS #7136 dated 26 April 2011 

London, 21 Apr (Sangeeta Shashikant) -- A World Health Organisation working group has reached agreement on the terms and conditions that would govern the sharing of influenza viruses mostly by developing countries, and the sharing of resulting public health benefits including vaccines and diagnostic kits.

The Open-Ended Working Group on Pandemic Influenza Preparedness for the Sharing of Influenza Viruses and Access to Vaccines and Other Benefits has had intense and contentious negotiations that were triggered by several developing countries in 2007.

The agreement concluded early Saturday morning of 16 April at the WHO headquarters in Geneva is a milestone as it puts in place for the first time in the WHO a Framework and accompanying contractual instruments known as "Standard Material Transfer Agreements" (SMTAs) to govern the sharing of influenza viruses and benefits.

The agreement is also precedent setting as it obligates the pharmaceutical industry and other entities (that benefit from the WHO virus sharing scheme) to share benefits, when they gain access to influenza viruses of pandemic potential.

However, despite being a landmark agreement, the Framework and the accompanying SMTAs have several shortcomings.

In particular, the Framework does not go far enough to secure from the industry and other entities a reasonable level of benefits nor are there mandatory commitments to share knowledge, technology and know-how with developing countries on the production of vaccines and other products.

For instance, the $20-30 million annual monetary contribution required of manufacturers and the 10% of vaccines/anti-viral medicines set aside are far too little to meet the needs of developing countries (which account for 80% of world population) in the event of a pandemic outbreak. These benefits should have been set at higher levels.

Furthermore, the granting of non-exclusive licenses at affordable royalties or royalty-free to developing countries for the production of patented vaccines and other products needed in a pandemic is only a voluntary benefit-sharing option under the SMTA. This should instead have been listed as a stand-alone mandatory benefit that all recipients of biological materials (such as the viruses and parts thereof) have to subscribe, to facilitate the sharing of knowledge, technology, and know-how, which developing countries need, to prepare themselves to counter an influenza pandemic.

During the negotiations, the developing countries had requested for greater benefits. However, the outcome was disappointing due to the resistance against the developing countries' demands by developed countries, in particular the United States. This resistance significantly diluted the benefit-sharing obligations and protected industry's profits and intellectual property.

Negotiations on a Framework began following the 2007 World Health Assembly when it emerged that WHO's virus-sharing scheme was not regulated and was inequitable. Developing countries that shared biological materials such as the viruses that cause influenza faced difficulties in gaining access to affordable vaccines and anti-virals as well as to technology and know-how to produce them, while the multinational pharmaceutical industry had access to influenza viruses and commercially profited from the virus-sharing system without having to share any benefits with the international community.

Developed countries also gained from WHO's virus-sharing scheme, as they had the resources to stockpile vaccines and other products obtained through pre-purchase agreements with the manufacturers.

Moreover, it has been revealed that there is a spike in the number of patent applications covering parts of influenza virus shared in good faith by affected countries such as Indonesia, Vietnam, China and Thailand with the WHO virus- sharing scheme, as well as on vaccines, treatments and diagnostics.

Thus, the negotiations were aimed at developing a framework that would govern the sharing of viruses, infuse transparency and equity into WHO's virus-sharing scheme by ensuring the fair and equitable terms and conditions for sharing of virus and of benefits to enable better pandemic preparedness by developing countries.

However, since the 2007 World Health Assembly Resolution WHA 60.28 that mandated the setting up of a process to initiate negotiations, developing countries have faced continuous opposition from developed countries, that resisted the notion of contractual instruments governing the sharing of influenza viruses as well as committing entities that gain from the virus-sharing system to compulsorily contribute fair and equitable benefits.

The resistance of developed countries and their reluctance to engage in negotiations on the contractual instruments and on benefit-sharing complicated and prolonged the negotiation process. On several occasions, particularly following the H1N1 outbreak, developed countries attempted to end negotiations on the then partially agreed Framework. Such attempts however failed, as a group of developing countries continued to persist to demand for a transparent, fair and equitable framework.

At the core of disagreements between developed and developing countries were issues such as the need for SMTAs to regulate the sharing of influenza viruses and benefits, intellectual property and the type of benefits that should be shared, and whether benefit-sharing is voluntary or compulsory.

The outcome of the negotiations that concluded early Saturday morning of 16 April reveals a compromise on these key issues.


The agreed objective of the Framework is "to improve pandemic influenza preparedness and response, and strengthen the protection against the pandemic influenza by improving and strengthening the WHO global influenza surveillance and response system ("WHO GISRS"), with the objective of a fair, transparent, equitable, efficient, effective system for, on an equal footing:

(i) The sharing of H5N1 and other influenza viruses with human pandemic potential; and

(ii) Access to vaccines and sharing of other benefits."

It was also agreed that the "Framework applies to the sharing of H5N1 and other influenza viruses with human pandemic potential and the sharing of benefits".

[WHO GISRS refers to laboratories designated by WHO. It comprises National Influenza Centres, WHO Collaborating Centres on Influenza, WHO H5 Reference laboratories and Essential Regulatory Laboratories.]


Developed countries, in particular the United States, also attempted to limit the definition of "PIP (Pandemic Influenza Preparedness) biological materials" that was used throughout the text of the Framework and the SMTA to "include human clinical specimens, virus isolates of wild type human H5N1 and other influenza viruses with human pandemic potential; and modified viruses prepared from H5N1 and/or other influenza viruses with human pandemic potential developed by WHO GISRS laboratories, these being candidate vaccine viruses generated by reverse genetics and/or high growth re-assortment."

They were opposed to any reference to the genetic materials and other parts of the biological material to be included in the definition. According to sources, the developed countries were not in favour of a comprehensive definition of biological materials out of concern that their entities would be prevented from appropriating parts of the biological materials using the intellectual property system.

The final agreed definition does include some parts of biological material. It states: "Also included in "PIP Biological Materials" are RNA extracted from wild-type H5N1 and other human influenza viruses with human pandemic potential and cDNA that encompass the entire coding region of one or more viral genes."

A footnote to the definition of PIP biological materials states: "OPERATIONAL EXEMPTION: materials shared within the WHO GISRS or with other laboratories specifically for non-commercial public health uses including surveillance activities, diagnostic applications, and quality assurance, are not handled as PIP Biological Materials. Their onward transfer for purposes other than those specified in the terms of reference of National Influenza Centers, WHO Collaborating Centres, Essential Regulatory Laboratories and H5 Reference Laboratories is not allowed under this operational exemption."

The impact of this exemption on the use of SMTA for the transfer of biological materials among WHO designated laboratories is unknown.

The lack of agreement to include a comprehensive definition of PIP biological material, as well as the inclusion of the operational exemption, led to the agreement that the experience arising from the use of the definition of PIP Biological Materials will be reviewed when the Framework and its Annexes are reviewed in 2016.


The agreed Framework has two contractual instruments. The first contractual instrument known as "Standard Material Transfer Agreement 1" is to be used when sharing PIP biological materials within the WHO GISRS, while the second contractual instrument known as the "Standard Material Transfer Agreement 2" is to be used when the WHO GISRS shares biological materials with entities outside the WHO GISRS.

Developing countries have been pushing for SMTAs to be a part of the Framework as such agreements are a common feature when transfers of biological materials take place and are critical to bind the recipients of materials to certain terms and conditions. Failure to comply with the terms and conditions would trigger a dispute settlement mechanism that involves mediation and arbitration. Having a SMTA is particularly important to bind entities outside the WHO GISRS to benefit-sharing obligations.

On the other hand, developed countries have been opposed to the use of SMTAs.

However, as negotiations progressed, developed countries were more amenable to having SMTA 1 provided that such a contractual agreement did not require executing an agreement for every transfer of biological material as well as did not contain arbitration as a mode for settling disputes.

These countries however continued to oppose SMTA 2 till a deal was brokered between having SMTA 2 and more diluted benefit-sharing obligations with regard to sharing intellectual property.

Thus, the agreed outcome requires that for PIP biological materials shared by countries with WHO GISRS and within WHO GISRS, SMTA 1 would be used. 

SMTA 1 contains provisions such as: the Recipient will comply with the agreed Terms of Reference; WHO will be informed about shipments of biological materials to entities inside and outside the WHO network; the Recipient shall actively seek participation of scientists from developing countries from where the influenza viruses and clinical specimens originated and engage them in preparation of manuscripts for presentation and publication; the Recipient shall appropriately acknowledge in presentations and publications, the contribution of collaborators including laboratories/countries providing clinical specimen or influenza virus with pandemic potential or reagents using existing scientific guidelines.

With regard to dispute resolution, SMTA 1 contains the options of negotiation or any other amicable dispute settlement and failing which one of the Parties may refer the dispute to the (WHO) Director General (DG) who may seek the advice of an independent Advisory Group with a view to settling the dispute. The WHO DG may make recommendations to the Parties regarding its resolution and shall report to the World Health Assembly on such matters.

[The independent Advisory Group comprises 18 members drawn from each WHO region with a skill mix of internationally recognized policy makers, public health experts and technical experts in the field of influenza.]

The US was particularly opposed to any provision on dispute settlement that contained arbitration as a method of resolving disputes, even where parties could only pursue arbitration when both parties agreed to do so. As a result, the option of arbitration does not feature in the provision on dispute settlement.

Proposals by India to empower WHO as a third party beneficiary to enable it initiate dispute settlement also did not make it to the final text.

The final outcome also emerged with a novel method of executing agreements. The terms of SMTA 1 are automatically binding on the WHO GISRS laboratories on acceptance by such laboratories of their WHO Terms of Reference or on designation by WHO to become a WHO laboratory. The Agreements do not require execution by the usual methods such as signature, click-wrap or shrink-wrap.

For entities outside WHO GISRS to gain access to biological materials, such entities would have to use SMTA 2.

SMTA 2 contains benefit-sharing options as well as other provisions such as the recipient shall appropriately acknowledge the contributions of WHO laboratories providing the materials, using existing scientific guidelines.

It further states that the recipient shall only further transfer the biological materials if the prospective recipient has concluded an SMTA with the WHO and any such transfers shall be reported to the WHO. It also allows the DG in exceptional circumstance to transfer biological materials to a prospective recipient while requesting such recipient to enter into an SMTA and report to the "Advisory Group" accordingly. It also states that the recipient may exchange PIP biological materials with any other holder of an SMTA concluded with the WHO.

On dispute resolution, it states that if a dispute cannot be resolved through negotiations or other non-binding means of the parties' choice, disputes shall be subject to binding arbitration on conditions that are mutually agreed by the parties.

SMTA 2 would be executed by WHO as a party to the agreement with the entity seeking access to biological materials.


Ensuring the delivery of fair and equitable benefit-sharing by entities outside of the WHO GISRS was at the heart of the negotiations.

While developing countries pushed for concrete benefit-sharing obligations to be placed on such entities and towards that end to the use of SMTA, developed countries opposed such an approach, as they were not keen to tie their industry to compulsory benefit-sharing obligations. Instead, developed countries pushed for voluntary benefit-sharing commitments by such entities.

The final agreed text reveals compromises on both sides. Entities outside the WHO GISRS that gain access to biological materials will have to commit to annual monetary contributions (see paragraph 6.14.3 of the Framework) as well as to commit to certain benefits from a list of benefit-sharing options listed in SMTA 2.

Paragraph 6.14.3 requires influenza vaccine, diagnostic and pharmaceutical manufacturers using the WHO GISRS to make an annual partnership contribution to WHO, commencing 2012 of an amount equivalent to 50% of the running costs of the WHO GISRS.

[A footnote adds, "The running costs of the GISRS for 2010 was approximately USD 56.5 million. The running costs of the WHO GISRS are understood to be a reference index for the partnership contribution of 50%. Such running costs may change over time and the partnership contribution will change accordingly. Such running costs are not to include the partnership contribution themselves."]

The amount to be contributed by each entity will be based on transparency and equity, based on their nature and capacities and to be decided by the DG in consultation with the "Advisory Group" and in collaboration with the industry. The Director-General is also expected to annually report to the Executive Board (comprising WHO member states) senior officials on the outcome.

In addition to the annual contribution, the SMTA also contains a list of benefit- sharing options for selective commitment by entities outside WHO GISRS that gain access to biological materials. These include prescribed minimum timely donations of, and affordably priced reserves of, vaccines/anti-virals or treatment courses by manufacturers to WHO.

Another option is granting to manufacturers in developing countries licenses on mutually agreed terms that should be fair and reasonable including in respect of affordable royalties, taking into account development levels in the country of end use of the products, on technology, know-how, products and processes for which it holds intellectual property rights for the production of influenza vaccines, adjuvants, antivirals, and/or diagnostics.

Yet another option is to grant royalty free licenses to manufacturers in developing countries or grant to WHO royalty-free, non-exclusive licenses on IPR, which can be sub-licensed, for the production of pandemic influenza vaccines, adjuvants, antivirals products and diagnostics needed in a pandemic. WHO may sub-license these licenses to manufacturers in developing countries on appropriate terms and conditions and in accordance with sound public health principles.

For the last 2 options above, the Recipient shall regularly provide to WHO information on granted licenses and the status of implementation of the licensing agreement. WHO shall provide such information to the Advisory Group (set up under the Framework).

There are also provisions covering manufacturers of products relevant to pandemic influenza preparedness and response, that are not manufacturing vaccines or anti-virals.

Optional commitments also include support, in coordination with WHO, to strengthen influenza specific laboratory and surveillance capacity in developing countries; and to transfer technology, know-how and/or processes for pandemic influenza preparedness and response in developing countries.


Disagreements over the issue of IP dominated much of the week-long negotiations on April.

Developing countries had proposed the grant of licenses to use IP at affordable royalties as well as for royalties to be waived as a pandemic becomes imminent, as a stand-alone benefit that all recipients holding IP must subscribe to. The rationale is to obtain mandatory commitments from the recipients to share proprietary technology and know-how with developing country manufacturers.

However, developed countries (in particular the US) were unable to agree to such a benefit. According to sources, the concern of developed countries was to safeguard their industries from competition from upcoming manufacturing of vaccines, anti-virals, diagnostic kits and adjuvants in developing countries.

The final agreement treats licensing of IP as one benefit-sharing option among many other benefits that a recipient could select as its benefit-sharing obligation.

Disagreements over IP also emerged during discussions on SMTA 1 that pertained to the WHO GISRS as developing countries pushed for biological materials to be kept free of IP. Even on this issue, developed countries pushed for their laboratories that were designated as WHO laboratories to be allowed to appropriate (and accordingly privatize) biological materials that were shared voluntarily by countries for public health purpose.

The final agreed text states: "Neither the Provider nor the Recipient should seek to obtain any intellectual property rights (IPRs) on the Materials."

Developed countries also supported the addition of 2 more paragraphs in the SMTA 1, in a bid to protect IP claimed prior to the adoption of the Framework as well as to ensure respect of IP over technology used for the generation and/or modification of Materials.


The final outcome also establishes an oversight mechanism that includes the World Health Assembly, the WHO DG and an independent 18-member Advisory Group of internationally recognized policy makers, public health experts and technical experts in the field of influenza, selected from the WHO regions.

Broadly, the Advisory Group will assist the DG in monitoring the implementation of the Framework in accordance with its agreed terms of reference. The Advisory Group will also present an annual report to the Director-General on its evaluation of the implementation of this Framework.

As the final outcome is based on many compromises, the final text builds in a review process. The final text states that the "Framework and its Annexes will be reviewed by 2016 with a view to proposing revisions reflecting developments as appropriate, to the World Health Assembly in 2017, through the Executive Board."


Several hours before agreement was reached on the text at 7 am on 16 April, intense disagreements broke out between developed and developing countries over whether the Framework should contain a reference to the Convention on Biological Diversity (CBD) and its Nagoya Protocol on Access and Benefit Sharing (recently concluded in November 2010), and how such reference should be made in the preambular paragraphs of the Framework.

As no resolution could be found, the matter has been left to the 2011 session of the World Health Assembly to resolve when it discusses the resolution that will adopt the Framework.

The options in the draft Resolution are as follows:

"[PP5[[Consider][recognizes]2 that this PIP Framework is the [international] specialized access and benefit sharing instrument for PIP Biological Materials that is consistent with and does not run counter to the objectives of the CBD and Nagoya Protocol.]" 

or "[Recognize that the PIP Framework is the international instrument for access and benefit sharing arrangements for PIP Biological Materials.]]" +