TWN Info Service
on Health Issues No.13
31 October 2005
WTO should review
TRIPS/health decision in view of avian flu
In view of a possible
avian flu pandemic, Consumers International (CI) has called on the WTO's
TRIPS Council to clarify the 30 August 2003 decision regarding the implementation
of paragraph 6 of the Doha Declaration on TRIPS and Public Health.
The 30 August 2003
decision by the WTO General Council allows generic copies of medicines
made under compulsory licences to be exported to countries that cannot
produce, under certain conditions.
All WTO member countries
are eligible to import under this decision but 23 developed countries
have said they will not use the system for imports. These 23 countries
which have opted out as importers, plus another ten who had to opt out
as a condition of joining the EU, will result in hundreds of millions
of people who will not be able to obtain generic medicines for stockpiles,
as countries will not have the capacity to produce the medicines.
The opt-out provision
creates the likelihood that the costs of producing stockpiled medicines
will be high and this will reduce the capacity to produce and result
in lower levels of stockpiles everywhere.
So far no country
has notified the WTO that they intend to use the 30 August 2003 decision
as either an importer or an exporter. With countries both in the
North and South at risk of a public health emergency should an avian
flu pandemic occur, and the fact that stockpiles of medicine are far
under-sourced, 'the lack of WTO notifications is damning evidence that
the current system is not working', says CI.
The article below
outlines these concerns. It is reproduced with permission
from the South-North Development Monitor (SUNS) of Wednesday 26
With best wishes
WTO should review
TRIPS/health decision in view of avian flu
Kanaga Raja (SUNS), Geneva, 25 October 2005
Geneva, 25 Oct (Kanaga Raja)
-- In light of the current situation of a possible avian flu pandemic
and other emergencies, Consumers International (CI) has called on members
of the WTO TRIPS Council to immediately begin a review of the intellectual
property rules and practices that are currently in place to address
public health problems.
The international non-profit organization issued this call Tuesday in
a statement addressed to the TRIPS Council, which is meeting this week
to take up amongst other issues the 30 August 2003 decision regarding
the implementation of Paragraph 6 of the Doha Declaration on TRIPS and
Consumers International, which represents the rights of consumers globally,
also requested the TRIPS Council to immediately issue a clarification
on how members who have opted out of the 30 August 2003 decision may
opt back in.
The 30 August 2003 decision by the WTO General Council relates to ensuring
access to medicines to countries with no or inadequate drug manufacturing
Paragraph (f) of Article 31 of the TRIPS Agreement provided that compulsory
licenses must be granted mainly to supply the domestic market, but the
Doha Ministerial Conference in 2001 decided that this should be changed
so that countries unable to manufacture the pharmaceuticals could obtain
cheaper copies elsewhere if necessary.
The WTO General Council on 30 August 2003 decided to allow generic copies
made under compulsory licenses to be exported to countries that lack
production capacity, under certain conditions and procedures.
All WTO member countries are eligible to import under this decision,
but 23 developed countries are listed as announcing that they will not
use the system for imports.
In a separate statement that is not part of the waiver, 11 other members
announced voluntarily that they would only use the system as importers
in situations of national emergency or other circumstances of extreme
According to the CI statement, the provision for countries to opt out
of importing generic drugs to address public health crises does not
serve the interests of consumers anywhere. It creates a strong likelihood
that the costs of producing stockpiled medicines will be high, particularly
for active pharmaceutical ingredients, which are very sensitive to economies
of scale and competition.
It will also reduce the capacity to produce, and will result in lower
levels of stockpiles everywhere. This, CI said, puts everyone North
and South at risk of potentially preventable death and suffering should
an avian flu pandemic occur.
As this week's TRIPS Council meets to review the effectiveness of the
implementation of the 30 August 2003 decision, CI urged WTO members
to consider the simple question: 'Is the current system working?'
In light of the current situation with respect to avian flu, CI called
on the TRIPS Council to immediately issue a clarification on how members
who have opted out of the 30 August 2003 decision may opt back in.
Furthermore, the CI statement asked the TRIPS Council to immediately
begin a review of the intellectual property rules and practices that
are in place to address public health problems, including but not limited
to the case of a possible avian flu pandemic.
This review should include:
( a) an assessment of the medical threats to the public health that
an avian flu pandemic, SARS (severe acute respiratory syndrome) or other
emerging health threats present;
( b) an assessment of the degree to which WTO members have prepared
for such cases, including the stockpiling of medicines for an avian
flu pandemic or other important threats;
( c) the degree to which the actual management of intellectual property
policies and practices are consistent with the 2001 Doha mandate, that
WTO members implement laws in a manner that is consistent with the protection
of public health and access to medicine for all; and
( d) the degree to which the TRIPS Agreement and its implementation
by WTO members should be modified in order to ensure that effective
measures are taken to protect the public from such emergencies.
The CI statement also came with an explanatory note providing details
on the issue. According to the note, compulsory licensing of patents
is consistent with the TRIPS agreement, and WTO members are free to
choose the grounds for doing so.
Despite countless news reports to the contrary, compulsory licensing
is not limited to cases of emergencies or even to public health.
That said, it is timely and important to highlight public health emergencies
as an important special case, and one that illustrates:( 1) the vast
gap between official rhetoric and performance in terms of essential
protections for public health; and (2) flaws in the 'solution' to the
problem of exporting medicines manufactured under a compulsory license.
On the fears of an avian flu pandemic, under the best circumstances,
assuming that the new virus causes mild disease, the world could still
experience an estimated 2 million to 7.4 million deaths.
Despite an advance warning that has lasted almost two years, the world
is ill prepared to defend itself during a pandemic. The WHO has urged
countries to stockpile anti-viral drugs for use at the start of a pandemic.
Around 30 countries are purchasing large quantities of these drugs,
but the manufacturer has no capacity to fill these orders immediately.
On present trends, the CI note said, most developing countries will
have no access to vaccines and anti-viral drugs throughout the duration
of a pandemic.
The WHO has received a promise for a donation of some 3 million doses
of oseltamivir (Tamiflu) from Roche. The US has a target of providing
vaccines for 20 million persons and anti-virals for another 20 million,
but only a fraction of this is actually available today.
The CI note cited the WHO as saying: "On present trends, most developing
countries will have no access to vaccines and anti-viral drugs throughout
the duration of a pandemic."
There are two causes for the small stockpiles - capacity and price.
Roche and Gilead, the two firms that control the relevant patents on
oseltamivir, have been unwilling or unable to expand production of the
medicine, and have yet to freely license their patents to generic suppliers.
According to the CI note, the WHO estimates that it would take a decade
for Roche to manufacture the desired oseltamivir stockpiles. There has
also been very little demand from governments for stockpiles of oseltamivir,
because of the high prices that Roche has charged - $6 per dose in some
Governments all over the world are now making announcements that they
will consider compulsory licenses for the oseltamivir patents.
These include members of the US Congress, as well as governments in
Argentina, Korea, the Philippines and Thailand.
The CI note said that Roche is now carrying out a public relations and
damage control effort to salvage as much control over the patents as
possible. There is also need for addressing increased generic
supplies of zanamivir and other medicines, for example.
[According to recent media reports, Roche, under pressure from the US,
has agreed to give the license to manufacture Tamiflu to four US generic
The CI note also highlighted a particular problem (about issuing compulsory
licenses) concerning the nature of the 30 August 2003 decision regarding
the implementation of Paragraph 6 of the Doha Declaration on TRIPS and
CI highlighted one of the problems, i.e. the 'opt-out' provision that
countries may elect as importers, and the mandatory 'opt-in' provisions
for both importers and exporters.
First, the WTO TRIPS Council should reflect that no countries have notified
the WTO that they intend to use the 30 August 2003 decision as either
an importer or an exporter. Given the current situation, this raises
profound questions about the way the global community perceives the
30 August 2003 decision.
With populations at a growing risk of a public health emergency, and
the clear evidence that stockpiles of medicine are far under-sourced,
"the lack of WTO notifications is damning evidence that the current
system is not working."
Second, CI said, is the fact that 23 countries opted out as importers,
and another ten were required to opt-out by the EC as a condition of
joining the EU. As a consequence, hundreds of millions of people will
likely be unable to obtain generic medicines for stockpiles, as they
will not have the domestic capacity to manufacture the medicines. These
include virtually everyone from the United States to Latvia.
The decision to opt-out of the 30 August 2003 decision, even for a national
emergency, is either evidence that the decision is highly unworkable
and irrelevant for these countries, or that trade officials want to
allow their own populations to go without life-saving medicines in a
time of emergency, the CI note said.
The fact that 33 countries are opting out has undermined the legitimacy
of the 30 August 2003 decision, and is partly responsible for the reticence
of developing countries to openly use this decision, said CI.
In a scenario of an avian flu pandemic, CI said that even if some countries
have sufficient or excessive stockpiles of generic medicines, they would
not be able to share medicines across borders. Estonia, Poland, UK,
Greece, Latvia, France, the Netherlands, New Zealand, Australia, the
US and other members of the group of opt-out countries will each be
in a state of autarky, an ironic obligation to be imposed on them by
an organisation officially devoted to liberalised trade.
The opt-out provision does not serve the interests of consumers anywhere, added
CI. It creates likelihood that the costs of producing stockpiled medicines
will be high, particularly for active pharmaceutical ingredients, which
are very sensitive to economies of scale and competition. It will also
reduce the capacity to produce and will result in lower levels of stockpiles
CI also urged the TRIPS Council members to consider the implications
of the terms of exclusivity for the protection of pharmaceutical test
data on access to medicines. Under Article 39.3 of the TRIPS Agreement,
members are required to protect pharmaceutical test data used for marketing
approval by regulatory authorities against unfair commercial use.
However, in the implementation of Art 39.3, certain WTO members have
chosen to grant exclusive rights to rely upon pharmaceutical test data
which is used for the registration of medicines. This practice erects
barriers to generic competition because it is expensive, time consuming
and sometimes unethical to replicate the tests.
The term of such protection generally ranges between five and ten years
in countries that have adopted this system. In the event of a public
health crisis, such type of legislation would mean that countries would
have to wait five to ten years depending on the period of exclusive
rights before there could be generic competition.
CI believed that any country that creates exclusive rights in health
registration data undermines the mandate of paragraph 4 of the Doha
Declaration, which asserts that the TRIPS Agreement "can and should
be interpreted and implemented in a manner supportive of WTO members'
right to protect public health and, in particular, to promote access
to medicines for all."
The CI note also said that the 30 August 2003 decision by the WTO General
Council was widely criticized by public health groups on the grounds
that it was restrictive, complex and protectionist.
It allows wealthy countries to export to poor countries, while restricting
imports from poor countries to rich countries. It does not explicitly
recognise insufficient economies of scale or comparative advantage as
a basis for determining eligibility for importing countries, even though
the realisation of efficient scale economies and favourable comparative
advantage is one of the main putative advantages of liberalised trade.
Decisions regarding remuneration are made in exporting rather than importing
countries, while the procedures for compulsory licensing for export
for public health reasons are far more complex and burdensome than are
required for compulsory licensing for domestic use, or when compulsory
licenses are issued as a remedy to anti-competitive practices under
Article 31.k and Article 40 of the TRIPS Agreement.
The African Group proposal seeks to solve some of the problems with
the 30 August 2003 decision by the WTO General Council, and should be
supported, the CI recommended.
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