TWN Info Service on WTO and Trade Issues (Feb09/13)
voice concerns to WHO, WTO on seizure of generic drugs
Geneva, 19 Feb (Kanaga Raja) -- Sixteen public health, consumer and development groups have sent separate letters to the heads of the World Health Organization (WHO) and the World Trade Organization (WTO) voicing their concerns over recent seizures by Dutch customs authorities of Indian generic drugs shipped through the Netherlands en route to Brazil, Colombia and Peru.
In their letter dated 18 February to WHO Director-General Dr Margaret Chan, the NGOs asked her to "immediately undertake an assessment of the risks to public health programs presented by such seizures and any anti-goods-in-transit provisions that exist in current or proposed trade agreements, including those relating to anti-counterfeiting initiatives."
In conducting the assessment, the WHO is asked to "interview developing country governments, UN agencies and other entities engaged in the trans-border delivery of generic medicines to developing countries, to fully document the extent to which medicines in transit are at risk regarding seizure or liability for infringement."
In a separate letter to WTO Director-General Pascal Lamy, the groups called on him to "explore with the European Union the extent to which its customs rules and provisions in trade agreements present risks to goods in transit, and undermine the commitments made in 2001 in the Doha Declaration on TRIPS and Public Health concerning access to medicines."
The sixteen non-governmental organizations that signed both the letters are BUKO Pharma-Kampagne; Consumers International; Consumers Union; Essential Action; HAI Africa; HAI Asia Pacific; HAI Europe; HAI Global; HAI Latin America and Caribbean; Health GAP; Iqsensato; Knowledge Ecology International; Medico International; Oxfam International; Third World Network; and U. S. PIRG.
a world with territorial patent rights, it is important that the rules
for 'goods in transit' permit the transport of medicines from places
where they can be made to places where they will be used. The Dutch
seizures have drawn attention to this issue, as has the recent disclosure
of MSF that they regularly transport and temporarily store medicines
"It is time that the World Health Organization, the institution that we look to for a lead in international health and development gave strong and clear guidance on the interpretation of international trade agreements that so adversely affect health. The health of millions of people worldwide who depend on life-saving quality assured generic medicines will be in jeopardy unless action is taken now by the World Trade Organization to give clear guidance to its Members on goods in transit. This situation cannot be allowed to continue," said Tim Reed of HAI Global.
In their letter to WHO Director-General Dr Chan, the groups said that in recent years there has been a flurry of activity regarding new trade agreements and rules to enforce patents and intellectual property rights. One important aspect of those rules are measures that concern "goods in transit." Under some legal traditions and consistent with WTO rules, goods in transit are exempt from normal restrictions associated with patents or other intellectual property rights, when en route to a market where the use is legitimate.
"This approach is not uniform, however, as illustrated recently by several seizures of medicines by Dutch customs officials," said the letter to Dr Chan.
groups noted that the Dutch cases involved medicines manufactured in
Citing industry reports, the letter noted that at least four cases of Indian generic medicines in transit in the Netherlands were seized by Dutch customs authorities from October 15, 2008 to December 12, 2008: Clopidogrel Bilsulphate API (to Colombia); Olanzapine 10 mg Tabs (to Peru); Rivastigmine 3 mg Tabs (to Peru); and Losartan - API (to Brazil).
According to the manufacturers, all products were legitimate generics and did not violate any patent rights in the exporting or the importing countries.
groups said that the seizure of the shipment containing Losartan active
pharmaceutical ingredients (APIs) destined for
The letter to Dr Chan said that the European Union is currently seeking very aggressive provisions regarding customs procedures in a number of proposed bilateral and regional trade agreements. The topic of provisional measures is also a key element in the secret negotiations for a new Anti-Counterfeiting Trade Agreement (ACTA).
According to some reports, said the NGO letter, there are proposals in the ACTA negotiations to require the seizure of goods that infringe on patents, even for goods in transit. Whether intentional or not, additional risks to goods in transit are also found in the International Medical Products Anti Counterfeiting Taskforce (IMPACT)'s "Principles and Elements for National Legislation against Counterfeit Medical Products" and World Customs Organization's "Provisional Standards Employed by Customs for Uniform Rights Enforcement (SECURE)."
The groups said that they were bringing these facts to the WHO chief's attention in part to illustrate how TRIPS plus intellectual property rules can impede access to generic medicines in developing countries. "The European Union rules and the actions of the Dutch customs officials are clearly designed to disrupt the supply of legitimate generic medicines to developing countries."
Noting that the WTO TRIPS agreement provides the option of exempting goods in transit from the enforcement of patents, the groups said that the European Union's rules and actions go beyond the required enforcement standards of the WTO TRIPS agreement, and do so in a manner that is clearly inconsistent with the 2001 Doha Declaration on TRIPS and Public Health.
Among other things, said the groups, the implementation of the WTO's Decision of 30 August 2003 regarding the export of pharmaceutical products to countries with inadequate manufacturing capacity, already seen as complex, will become even more problematic if patent rights are enforced for goods in transit.
The groups also underscored that the European Union rules and actions are clearly in conflict with WHO resolution WHA61.21, which states that "international negotiations on issues related to intellectual property rights and health should be coherent in their approaches to the promotion of public health."
WHA61.21 further calls upon member states to "take into account, where appropriate, the impact on public health when considering adopting or implementing more extensive intellectual property protection than is required by the Agreement on Trade-Related Aspects of Intellectual Property Rights."
"The importance of this issue is much broader than the cases of four seized shipments of generic medicines to three countries. It presents enormous risks for the WHO, UNAIDS, the Global Fund, UNITAID, and the many development and public health agencies and other entities engaged in the supply of medicines to developing countries that ship medicines through Europe or other countries that sign agreements with anti-goods-in-transit provisions," said the letter to Dr Chan.
The groups called on the WHO to "immediately undertake an assessment of the risks to public health programs presented by such seizures and any anti-goods-in-transit provisions that exist in current or proposed trade agreements, including those relating to anti-counterfeiting initiatives."
"In doing this assessment, we ask that the WHO interview developing country governments, UN agencies and other entities engaged in the trans-border delivery of generic medicines to developing countries, to fully document the extent to which medicines in transit are at risk regarding seizure or liability for infringement."
The groups further asked the WHO, if its own assessment of EU regulations uncovers these threats to public health, to communicate its concerns, and provide relevant technical advice to the European Union with respect to its own customs rules, and to ask the EU to re-examine provisions in trade agreements that present risks to goods in transit.
In a separate letter to WTO Director-General Lamy, the groups, referring to the recent seizures of in-transit medicines by Dutch customs authorities, including cases where medicines manufactured in India were en route to destinations in Brazil, Colombia and Peru, said that there are long-standing traditions to provide exceptions to patent rights for aircraft and marine vessels in route to markets, and for goods in transport, including, for example, the specific exemption of goods in transit from the provisions of Article 51 of the TRIPS agreement, concerning "Suspension of Release by Customs Authorities."
According to the groups, the TRIPS agreement does not require Article 51 to apply to patented goods, and the exception for goods in transit is discretionary rather than mandatory. In addition, TRIPS is part of a larger plan to "reduce distortions and impediments to international trade," and seeks to "ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade."
Article 41.1 of the TRIPS agreement provides that enforcement procedures "shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse" and Article 41.2 provides that the procedures shall be "fair and equitable."
Article V of the GATT defines goods in transit, and provides that "There shall be freedom of transit through the territory of each contracting party, via the routes most convenient for international transit, for traffic in transit to or from the territory of other contracting parties."
The letter to Director-General Lamy said that this provision extends to all goods in transit, and provides that "all charges and regulations imposed by contracting parties on traffic in transit to or from the territories of other contracting parties shall be reasonable, having regard to the conditions of the traffic."
The letter also noted that with regard to trade in medicines, the 2001 Doha Declaration on TRIPS and Public Health recognized "the gravity of the public health problems afflicting many developing and least developed countries" and stressed "the need for the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and international action to address these problems."
In Paragraph 4 of that Declaration, WTO members agreed 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 letter also voiced concerns that the implementation of the WTO's Decision of 30 August 2003 regarding the export of pharmaceutical products to countries with inadequate manufacturing capacity will become even more problematic if patent rights are enforced for goods in transit.
Noting that the Dutch seizures of medicines in transit from India to South America were made under the European Union's rules regarding customs measures, the groups expressed concerns that these rules, and many other rules being proposed in a plethora of new trade agreements, do not protect legitimate sellers and buyers of generic medicines, when those goods move in global trade.
"There are reports that the current drafts of the proposed plurilateral Anti-Counterfeiting Trade Agreement (ACTA) does not provide adequate protections for goods in transit, and we are also concerned about many of the proposals regarding provisional measures and customs practices that are seen in bilateral trade agreements."
"Should countries be free to aggressively enforce patent and other intellectual property claims against goods in transit, or should goods in transit be protected when they are clearly intended to markets where their use is legitimate?" the groups asked.
This issue is particularly relevant to the challenge of providing "access to medicine for all," a central objective of the Doha Declaration on TRIPS and Public Health, and the World Health Organization's recent Global Strategy on Public Health, Innovation and Intellectual Property Rights, said the letter to Lamy.
Given the importance of this issue, the groups requested the Director-General to explore with the European Union the extent to which its customs rules and provisions in trade agreements present risks to goods in transit, and undermine the commitments made in 2001 in the Doha Declaration on TRIPS and Public Health concerning access to medicines.
Meanwhile, the medical humanitarian organization Medecins Sans Frontieres (MSF) earlier sent a letter to Mr Laszlo Kovacs, European Commissioner for Taxation and Customs Union, and Baroness Catherine Ashton, European Commissioner for Trade, following the seizure of medicines in transit in the EU to developing countries for alleged patent infringement.
In its letter, the group expressed concern over the potential consequences of the recent seizure of medicines in transit in the EU to developing countries for alleged patent infringements on the basis of the Council Regulation (EC) No 1383/2003 by Dutch customs authorities.
Citing the recent case involving the seizure by customs authorities in Holland of losartan potassium, a generic version of the active ingredient for a patented drug used to treat high blood pressure, manufactured in India by the generic company Dr Reddy and in transit to Brazil, MSF expressed concern that the establishment of a precedent in EU countries to use such provisions to intercept legitimate trade between generic manufacturers and developing countries could severely impact the affordability and availability of medicines in developing countries.
It pointed out that the EC Regulation No 1383/2003 goes beyond the obligations required under the TRIPS Agreement in relation to customs authorities as set out in Article 51 of the TRIPS Agreement. The footnote of the same article states that "It is understood that there shall be no obligation to apply such procedures to imports of goods put on the market in another country by or with the consent of the right holder, or to goods in transit."
The EC Regulation No 1383/2003 nonetheless applies such procedures to goods in transit, said MSF.
Many countries do not have manufacturing capacity to produce medicines, or rely on importing more affordable generic medicines from abroad in order to treat their population. As such, the trade in legitimate medicines between countries is fundamental to ensuring access to medicines for millions. Provisions to ensure such countries can access medicines, enshrined in the Doha Declaration and the WTO August 30th decision, cannot be implemented effectively if on key transit routes, the risk exists that supplies can be regularly subject to interception based on assertion of patent infringement in the transit country, said MSF.
MSF was concerned that its own medicine procurement activities may be affected by the EU customs authorities' use of the Regulation. "Such actions may have a chilling effect on exporters and require alternative and potentially more expensive transit routes to be used that would inhibit the supply of generic medicines both to developing countries and to humanitarian organisations such as MSF who have logistical centres based in Europe."
It called on the European Commission to: Clarify its position regarding the implementation of the EC Regulation No 1383/2003 with regard to pharmaceutical products; review the effect of the EC Regulation No 1383/2003 on the supply of legitimate medicines, given the EU stated commitment to the full implementation of the Doha Declaration on TRIPS and Public health and the WTO August 30th decision; and clarify whether such provisions are proposed for inclusion in EPAs and in the current negotiations of the EU Free Trade Agreements. +