TWN Info Service on WTO and Trade Issues (Feb10/12)
22 February 2010
Third World Network

Members discuss implementation of TRIPS "Para 6" solution
Published in SUNS #6864 dated 16 February 2010

Geneva, 15 Feb (Kanaga Raja*) -- WTO Members held an informal consultation on 12 February on the implementation of the "Paragraph 6" solution in respect of the TRIPS Agreement aimed at helping developing countries with insufficient or no manufacturing capacities in the pharmaceutical sector to import cheaper generic medicines produced under compulsory licensing.

In Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (November 2001), Ministers recognized 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.

They instructed the Council for TRIPS to find an "expeditious solution" to this problem.

In a Decision of the General Council of 30 August 2003, WTO Members agreed that the obligations of an exporting Member under Article 31 (f) of the TRIPS Agreement shall be waived with respect to the grant by it of a compulsory license to the extent necessary for the purposes of production of a pharmaceutical product and its export to an eligible importing Member in accordance with the terms set out (in the Decision).

Article 31(f) of the TRIPS Agreement states that production under compulsory licensing must be predominantly for the domestic market. This provision has hampered the ability of countries that are unable to produce pharmaceutical products from importing cheaper generics from countries where pharmaceuticals are patented, according to trade officials.

In the Decision, Members agreed that the waiver will be in force until an amendment is made to the TRIPS article.

In 2005, Members approved changes to the TRIPS Agreement making permanent the 2003 Decision. This will be incorporated into the TRIPS Agreement when two-thirds of the Membership has ratified the amendments. There was a deadline of 1 December 2007 set for this, but the General Council extended the deadline to 31 December 2009 and subsequently to 31 December 2011. The waiver remains operative till then, according to trade officials.

According to trade officials, Members want to improve the present annual reviews in the TRIPS Council on how the waiver of 2003 (and the 2005 amendment to the TRIPS Agreement, when it takes effect) is working.

Paragraph 8 of the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health of 30 August 2003 provides that the Council for TRIPS shall review annually the functioning of the system set out in the Decision with a view to ensuring its effective operation and shall annually report on its operation to the General Council.

(At a meeting of the TRIPS Council on 27-28 October 2009, several countries including Egypt, on behalf of the African Group, Tanzania, on behalf of the Least Developed Countries, India, Ecuador, Pakistan, Brazil and Venezuela, called for consultations to identify any difficulties encountered in the use of the system and suggestions to solve these problems. See IP/C/53.)

The Chair, Ambassador Karen Tan of Singapore, held the consultation in order to provide a platform for Members to share their experiences, trade officials said.

Only Canada provided a description of its own experience in respect of a compulsory license issued for a medicine to be exported to Rwanda.

So far, Canadian exports to Rwanda are the only time that the system has been used, said trade officials. Canada said that the shipments to Rwanda took longer than expected because the company seeking a compulsory license needed time to find an interested importing country, as well as on account of  Rwanda's procurement tendering procedures.

(Canada listed several key dates in implementing the WTO system and its Access to Medicines Regime in order to explain why it took some time for the shipments to reach Rwanda. The Access to Medicines Regime was designed to be demand-driven but in this case, it was driven by the supplying company, Canada said. Any delays were not caused by the WTO system but by the Canadian company's search for a customer and Rwanda's procurement procedure, it added.)

[In a posting on the IP-Health list-server on 12 February, Richard Elliot, Executive Director of the Canadian HIV/AIDS Legal Network, noted that there is little reason at this time to think that the Canadian Access to Medicines Regime will be used again in the absence of some kind of reform.  He further noted that dozens of Canadian civil society groups have called for reforms to the Canadian regime (which they have said is "seriously flawed"). A bill is currently before Parliament to simplify considerably the current Canadian legislation, he added.]

According to trade officials, a number of countries including India, China, Venezuela, Brazil, Indonesia, Ecuador, Cuba and Egypt said that this suggested that the system is not working. The length of time that has been taken in Canada's case also showed that the system is too complicated, they added.

Several other countries including Argentina, Canada, Switzerland, the US and the European Union took a different view.

According to trade officials, some of them argued that compulsory licensing is not the objective, and that it is rather one tool among many to ensure that the poor have access to affordable medicines. This has been achieved by improved international procurement, increased donations of free medicines and cut-price supplies by patent-owners, some of them said.

Pakistan and Nigeria (on behalf of the African Group) called for what Pakistan called a "performance evaluation" - to learn the lessons of how the WTO system is being implemented without changing the system itself, said trade officials.

India proposed the holding of a workshop open to non-governmental organizations and other practitioners as well as delegates.

In its intervention at the informal meeting, India said that it has always been of the view that the Doha Declaration on TRIPS and Public Health constituted a major landmark in the short history of TRIPS because it recognized the primacy of public health needs and the sensitivity of this Agreement to the problems faced by the poor in the less developed countries.

Along with several other Members, India worked relentlessly on the Doha Ministerial Declaration on Public Health (2001) and the Decision of 30 August 2003 on implementation of Para 6 of the Doha Ministerial Declaration. The  hope was that the August 30 Decision would genuinely and completely address the problems faced by WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector to address their public health problems.

"Today, obviously, we are disappointed since the Para 6 provision has been used only once in over 6 years."

Complimenting Canada on its efforts to supply AIDS drugs to Rwanda through operationalisation of the Para 6 system, India however noted that it took about three years to supply the medicine.

"God forbid, if Rwanda were to order additional medicines, they would need to go through the same process again."

India recalled that it had mentioned during the last TRIPS Council meeting in October 2009 that while Members take stock of the acceptances of the Protocol, it is also time for reflection on the obstacles to use of the system.

"The Para 6 system, it may be recalled, was supposed to be an 'expeditious solution' to the crisis in access to medicines by countries with insufficient or no manufacturing capacity. Experience shows that it has neither been 'expeditious' nor a 'solution' to public health needs."

Access to medicines is a crucial issue particularly to the poorest populations of the world, said India, further noting that the issue has rightly attracted considerable interest in the UN Human Rights Council and has been highlighted in the report of the Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

India stressed that it is time to move beyond the ritualistic consideration of the item in the year-end TRIPS Council meeting of October.

Numerous studies have been done on this issue by experts, including some studies commissioned by the European Parliament and Civil Society Organizations (CSOs) engaged in public health. Empirical evidence of the actual functioning of the Para 6 system is also available in the Canada-Rwanda case.

"It is therefore time for an in-depth study on the subject to be done through the establishment of a Dedicated Workshop to discuss 'Implementation of the Para 6 system and the Canada-Rwanda experience'."

As for participation, India suggested that the Workshop be open to all WTO Members and CSOs in the public health sector who could share their practical experiences. Experts in the field of public health should also be invited. Apotex, the Canadian pharmaceutical manufacturer, should be invited to share their first-hand experience.

India called for the workshop to be established as soon as possible so that it could report to the TRIPS Council meeting in October this year where a review as mandated in Para 8 of the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health of 30 August 2003 could take place (WT/L/540).

The recommendations emerging from the Workshop could then be considered in the TRIPS Council for further necessary action, said India.

In its intervention at the informal consultations, Brazil welcomed the opportunity to discuss and identify the obstacles that have prevented developing countries from making full use of the Paragraph 6 system of the Doha Declaration.

Designed to provide affordable medicines to countries with limited or no manufacturing capacity, the Paragraph 6 system is a milestone in the history of the implementation of the TRIPS Agreement, said Brazil, adding that nevertheless, normative advancements always face the challenge of implementation - and this system is no exception. "Years after its adoption, it has yet to fulfill this objective."

Pointing out that it had accepted the Protocol amending the TRIPS Agreement on 13 November 2008, Brazil said that to this moment, however, it has not yet had the opportunity to use the system, either as a supplier or a beneficiary. "Only once has the system been used, and we know the difficulties faced by the supplier and the beneficiary. This solitary example indicates that we are probably not in the right path," said Brazil.

In order to improve the Paragraph 6 system, it is crucial to understand the difficulties countries and international organizations have had in implementing it. For this reason, Brazil said that it strongly supports the proposal for a workshop under the auspices of the TRIPS Council, which could bring together all relevant stakeholders.

According to trade officials, India's call for a workshop was supported by Brazil, China, Venezuela, Pakistan, Indonesia, Ecuador, Nigeria (on behalf of the African Group), and Cuba.

Several others including the US were unsure about opening the discussion to participants other than delegates (such as NGOs). They were willing to participate in consultations on future steps, which would include the proposal by India for a workshop, said trade officials.

The US pointed out that the WTO already provides opportunities for dialogue with others in the annual WTO Public Forums.

The Chair said that she will report to the TRIPS Council meeting of 2-3 March.

After that, the Council will have a new Chair and Ambassador Tan said that she would recommend that her successor undertake consultations on future steps, including the possibility of a workshop, in order to make the annual review more useful.

(* With inputs from Riaz K Tayob.)