TWN Info Service on WTO and Trade Issues (Mar10/03)
9 March 2010
Third World Network

TRIPS Council addresses patents on life forms and access to medicines
Published in SUNS #6877 dated 5 March 2010

Geneva, 4 Mar (Kanaga Raja) -- A meeting of the regular WTO TRIPS Council on 2 March amongst others discussed the implementation of the "Paragraph 6" solution in respect of the Doha Declaration on the TRIPS Agreement and Public Health, and the review of Article 27.3 (b) of the TRIPS Agreement relating to the patentability of life forms and the protection of plant varieties.

During the discussions at the TRIPS Council on the review of Article 27.3 (b) of the TRIPS Agreement, Bolivia tabled a submission (IP/C/W/545) calling for an urgent and in-depth review of the said article.

Bolivia, in its communication, concluded that an urgent review of Article 27.3 (b) was needed to prohibit the patenting of all life forms, ensure the protection of the innovations of indigenous and local farming communities and prevent anti-competitive practices that threaten food sovereignty in developing countries. (See separate article.)

Also at the meeting, India and Brazil reiterated their concerns over the actions of customs authorities of European Union member-countries in detaining generic medicines whilst in transit to other developing countries.

India told the TRIPS Council: "We wish this issue was addressed with the seriousness it deserves and resolved and we did not need to raise this issue in this meeting. Unfortunately, we do not see any concrete steps..."

On the issue of the implementation of the "Paragraph 6" solution, which is aimed at helping developing countries with insufficient or no manufacturing capacities in the pharmaceutical sector to import cheaper generic medicines produced under compulsory licensing, trade officials said that there were continued differences among Members on whether the fact that the "Para 6" system was only used once would constitute sufficient evidence that the system is failing.

According to trade officials, several developing countries reiterated the view that the "Paragraph 6" system might be failing. They cited the fact that the system has only been used once - Canada exporting to Rwanda.

They again called for a workshop to look at real-life experiences in using the system or in trying to use the system.

On the other hand, trade officials said that a number of developed countries continued to argue that the single case in respect of Canada does not prove anything because the system is only one of a range of options for allowing the sick in poorer countries to access affordable medicines. Several pointed out that the only factual evidence brought to the TRIPS Council so far - by Canada - suggests that the length of time needed for Canada to export to Rwanda was not caused by the system but by other factors.

Speaking on this issue, Egypt said that the issue pertaining to the functioning of the solution to guarantee access to medicines to countries with limited or no manufacturing capacity is critical for developing countries and particularly for Africa.

It expressed concern that the system has not been as helpful in addressing this critical public health problem as it had hoped. The fact that the system has only been used once raises questions as to its effectiveness, let alone expeditiousness.

Likewise, said Egypt, the frail drive to accept the amendment Protocol is incomprehensible in its own right. Many questions spring to mind, including administrative and regulatory complexity of the system, lack of appreciation of business methods in supplying markets and associated overhead costs, as well as constraining requirements.

These questions need to be addressed, said Egypt, strongly supporting the proposal to organize a workshop to address these questions and others of relevance, and to include in this workshop participants from all the various stakeholders. It urged those Members that seem reluctant to join the consensus on convening this workshop with the participation of all stakeholders to reconsider their position in view of the direct issues of access to medicines, and ultimately, of human rights involved in this important problem.

Canada had provided its account of the use of the system in an informal consultation on 12 February. Canada asked for its account to be put on the record of this formal TRIPS Council meeting. (See SUNS #6864 dated 16 February 2010.)

Chairperson Ambassador Karen Tan of Singapore summarized the informal consultation that she had held on this issue on 12 February.

According to trade officials, in her summary, Ambassador Tan said that she found the informal meeting to be very constructive. She felt that Members were interested in sharing experiences on the use of the system and ready to engage in practical and fact-based discussions in order to have a full understanding of the operation of the system.

As regards the specific points made by delegations, some of them were concerned that the system had been used only once by Rwanda and Canada, which raised the question of whether the system had met its objective of providing an expeditious solution to problems faced by countries with insufficient or no manufacturing capacities in the pharmaceutical sector, she said.

The meeting also heard that the fact that the system had only been used once did not imply that it was inadequate, since there were also other ways to get medicines to patients, she added.

Some delegations argued that the number of licences issued under the system was not the proper measure of its success, and that the use of the system by Rwanda and Canada had demonstrated that the system could work effectively; the system could only play a supportive role in the wider effort to improve access to essential medicines, and its mere existence might have had a positive impact on drug prices, said Ambassador Tan.

The Chairperson reported that concerns were also expressed about a period of some three years that it had taken to deliver the medicines to Rwanda in this particular case. She said that Canada shared experience on its use of the system, giving a detailed account of the time-line of the shipments under the system, attributing the bulk of the time consumed not to the specific requirements of the Paragraph 6 system, but to factors such as identifying a recipient country for the available medicine, and the government procurement process in the recipient country which required a competitive tendering process.

As regards the topics that might warrant more discussion, the Chair said that some delegations suggested that the focus could be on the experience from the use of the system by Rwanda and Canada to consider whether the system is working effectively. Some delegations said that the performance of the system could be appraised more generally to assess whether there were any procedural problems regarding its operation.

Some Members said that, bearing in mind that the system was demand-driven, it would be helpful to know whether there were some concrete obstacles why potential importers did not procure under it. Among other issues mentioned that might merit further discussion were safety and efficacy of medicines procured under the system, government procurement, and the dissemination of information with a view to building capacity in developing countries to use the system, said the Chair.

According to the Chair, Members also discussed the appropriate ways to address these issues, agreeing that annual reviews were a good platform for sharing experiences and evaluating the operation of the system. However, some delegations wished to complement this work by organizing a dedicated workshop open to all stakeholders. Some other delegations said that the review process was a member-driven exercise, but believed that its usefulness could be enhanced, for example, by more factual input, she said.

She also reported that there were calls for the Chair to consult with interested delegations on how to best address the issues raised in the discussion. A number of delegations expressed their willingness to participate in any consultations that the Chair might decide to hold on the matter.

According to trade officials, Ambassador Tan's successor, Mr Martin Glass of Hong Kong-China, who took over at the end of the formal meeting, will consult with Members about the workshop.

However, trade officials said that some developed countries pointed out that the informal consultation on 12 February was already held in response to a call from several developing countries that wanted an opportunity for Members to share their experience in using or trying to use the system. Only Canada actually did so, they said.

According to trade officials, the US said that Members were being asked to take a decision (on holding a workshop) under the "other business" part of the meeting's agenda, which is normally reserved for brief exchanges on issues raised at short notice and not for decisions.

The discussion on the submission by Bolivia came within the agenda items of review of the provisions of Article 27.3 (b), relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD), and protection of traditional knowledge and folklore.

Speaking at the meeting, Bolivia said that with its communication, it wants to continue to contribute to the analysis of a topic that, in its understanding, definitely needs a multilateral solution designed to exclude the possibility of patenting life in all its forms, including biological resources, micro-organisms, genes, gene sequences and non-biological and microbiological processes.

Bolivia then summarized the contents of its communication on a review of Article 27.3 (b). It considered that, among others, the exclusion of patentability of life forms is one of the most important issues within the Doha Development Agenda.

Highlighting a number of challenges, Bolivia said that it is not the only one facing them, but that several developing countries, small peasants or indigenous peoples share these same concerns, that is, amongst others, to put an end to bio-piracy, which is the extensive patenting of life forms, the misappropriation of biological resources originating from developing countries by developed countries.

Also, to stop the increasing concentration of corporate control over the agriculture industry due to various acquisitions and overuse of intellectual property rights, undermining the rights of indigenous peoples, local community and farmers, including the right to exchange and save seeds and the State's food security and sovereignty.

Another concern is to limit the proliferation of trade agreements and initiatives focused on enforcement of intellectual property that pressure developing countries to adopt a particular model of intellectual property, which is not in the best interest of the countries.

According to Bolivia, all these reasons allow the Doha Development Agenda and the TRIPS Council to have a strong case for an in-depth and accelerated review of Article 27.3 (b).

According to trade officials, Cuba, Nicaragua, Ecuador and Guatemala supported Bolivia.

Speaking generally under the agenda items of review of Article 27.3 (b), TRIPS/CBD relationship and protection of traditional knowledge and folklore, India said that the inadequacy in the TRIPS Agreement to combat bio-piracy and misappropriation of genetic resources and traditional knowledge (TK) needs no elaboration following the exhaustive technical discussions on the issue over the last 9-10 years.

The TRIPS Agreement continues to ignore the numerous IPR-related obligations in the CBD including obliging countries to cooperate to ensure that patents and other IP rights do not run counter to the objectives of the CBD (Article 16.5). This contradiction not only obstructs the proper implementation of the CBD but also causes an imbalance in the TRIPS Agreement, said India.

It was disappointed to note that while work in the CBD has been progressing steadily, there has been lack of serious engagement in the TRIPS Council to address the issue of misappropriation of genetic resources (GR) and TK.

India further said that the steep rise in bio-prospecting for natural remedies and other purposes, and patent applications based on GR and associated TK, can have undesirable consequences in the absence of internationally acceptable legal regulations. "Justice delayed is justice denied."

As regards the way forward, India pointed to document TN/C/W/52 as providing a sound basis for the way forward on substantive and procedural treatment of TRIPS-CBD, GI Extension and GI Register.

India noted that in discussions on the TRIPS-CBD issue in this Council, reference has been made by some Members in the past to the WIPO Inter-Governmental Committee (IGC) on GR, TK and folklore. While it welcomed the renewed mandate of the IGC, as also the constructive engagement of Members there, the TRIPS Council should not get distracted by the work in WIPO on the issue. The mandate of the IGC is very different from the mandate in the Doha Ministerial Declaration and Paragraph 39 of the Hong Kong Ministerial Declaration.

What Members are discussing here is a mandatory disclosure requirement to be incorporated in the TRIPS Agreement. Serious and meaningful discussions on this issue can take place only at the WTO, said India.

Also speaking under these agenda items, Egypt said that the protection of biological resources, traditional knowledge and folklore presents an important developmental issue for Egypt with implications on the preservation and development of national Egyptian natural and cultural heritage.

It urged that the outcome of the negotiations on TRIPS/CBD should lead to the mandatory requirement for patent applicants to disclose the origin of biological material and traditional knowledge used in their inventions, evidence of prior informed consent and benefit sharing arrangements with the country of origin and the relevant communities.

It also welcomed the proposal submitted by Bolivia on the review of Article 27.3(b) of the TRIPS Agreement. It considered that the three issues raised in this proposal: the patenting of life forms; the protection of plant varieties; and traditional knowledge and the rights of indigenous communities, represent central issues with key implications for developing countries.

Under other business, India and Brazil raised the issue of the EU's seizure of generic drugs while in transit to a number of developing countries.

India said that during the three TRIPS Council meetings last year, it had shared with Members the serious impediments to access to medicines created by the drug seizures at EU ports. It shared details of the 17 seizures by the Dutch authorities in the year 2008, the seizure in Frankfurt in May 2009 and the seizure in Paris in October 2009. In all these seizures, the consignments originated from developing countries and most were destined for developing countries, including Brazil, Peru, Colombia, Ecuador, Mexico, Nigeria, Venezuela, and Vanuatu.

It noted that in all cases, customs authorities acted on the basis of EU Regulation 1383/2003.

"We wish this issue was addressed with the seriousness it deserves and resolved and we did not need to raise this issue in this meeting. Unfortunately, we do not see any concrete steps," said India, adding that therefore at this meeting, it wished to update Members on developments since the October 2009 TRIPS Council meeting.

As to what India has done, it said that it has continued its bilateral efforts with the EC at the level of Ministers, senior officials in Capitals and the Indian Mission to the EU in Brussels. "Far from our concerns being addressed, we are yet to get details of the seizures from EU authorities."

India further said that its commerce secretary and its Ambassador to the EU had formally sought details of the seizures including (i) the duration of the seizure; (ii) names of the drug, exporter and importer; and (iii) details of the IPR holder whose rights have been allegedly infringed.

India recognized some steps taken by the EU. These include the "Explanatory Note" of July 2009 issued to Member States on the application of the EC Regulation 1383/2003. However, the Note merely shifts the blame on to Member States for applying their national laws and the responsibility for interpretation to the National Courts. The Note totally disregards the permissiveness of the EC Regulation itself, said India.

India also mentioned the process of Review of the Regulation 1383 which started in September 2008. This however, is a routine exercise commenced even before the issue of drug seizures was raised in the WTO and not aimed at addressing issues emerging from the drug seizures. As far as India was aware, the scope of the Review excludes the Regulation's compatibility with WTO provisions including GATT and TRIPS provisions and the spirit of the Doha Declaration.

From India's point of view, it did not see any concrete measures, including any signs of review of EC Regulation 1383/2003, in-spite of its inconsistency with provisions of GATT, the TRIPS Agreement and the spirit of the Doha Declaration on the TRIPS Agreement and Public Health.

Stressing that the seizures symbolize TRIPS plus enforcement, India said that generic drugs form the backbone of public health programmes in developing countries. Targeting of legitimate generic medicines, which are neither fake, nor counterfeit, nor pirated medicines, will have deleterious consequences on access to affordable and efficacious medicines and public health budgets. Donations from some developed countries to the poor populations of the world cannot fill the gaps in a sustainable way.

India stressed that the widespread and repeated seizures, under EC Regulation 1383, have an adverse systemic impact on: (i) the principle of universal access to medicines; (ii) national public health budgets; (iii) legitimate trade of generic medicines; (iv) South-South commerce; (v) use of TRIPS flexibilities; and (vi) seriously impair the efforts of civil society organizations engaged in providing medicines and improving public health in the least developed parts of the world.

"As long as the Damocles' sword of the Regulation 1383/ 2003 is hanging over our heads, we cannot take comfort from the fact that the frequency of seizures has reduced or that the matter is being looked into," said India, reiterating its call to the EU to urgently review the Regulation and bring it in conformity with WTO provisions including GATT, TRIPS Agreement and the letter and spirit of the Doha Declaration on Public Health.

Associating itself with India's statement, Brazil said that it has repeatedly voiced its concern over the seizure at European Union countries of generic drugs in transit, on allegations of patent infringement.

Brazil said that at the last session of the TRIPS Council, it had made reference to the fact that some contacts had been held between representatives from the Commission and from Brazil both in Brussels and in Geneva. It also mentioned that those "opportunities for dialogue" had not produced, unfortunately, any significant progress towards changing the most controversial element of the said EC regulation, "especially the principle of manufacture fiction".

"That is still the situation today... The fact that the possibility of new seizures is still open is a matter of concern to us," said Brazil.

According to trade officials, the EU said that it had provided information in lengthy bilateral meetings, and that its customs officers have to be able to check shipments because of the large amount of counterfeit drugs.

According to trade officials, the Council also discussed briefly "non-violation" cases, where positions remain unchanged, as well as various aspects of technical assistance.

At the end of the meeting, Ambassador Tan handed over the chair to Mr Martin Glass of Hong Kong-China. +