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Developing countries call for action on TRIPS at Doha WTO Ministerial Conference

The extreme urgency of the situation caused by the high prices of drugs resulting from the WTO’s patent regime prompted developing countries (led by the Africa Group) to seek a special meeting in the WTO’s TRIPS Council. The following is a report on the proceedings at this special one-day session held in Geneva on 20 June.

by Cecilia Oh

THE WTO TRIPS Council’s Special Discussion on TRIPS and Public Health on 20 June 2001 saw an overwhelming number of WTO Members expressing the need for action before and at the Doha WTO Ministerial Conference in November on the issue of intellectual property rights and access to medicines.

Fifty developing countries (including the Africa Group of countries, and countries from Asia, Latin America and the Caribbean) put forward a joint statement to the TRIPS Council (the full text of which is reproduced in the following article), asking the Doha Ministerial Conference to take steps to ensure that ‘the TRIPS Agreement does not in any way undermine the legitimate right of WTO Members to formulate their own public health policies and implement them by adopting measures to protect public health’.

The developing countries wanted affirmation of this common understanding as soon as possible, in order to clarify the differing (and restrictive) interpretations of the provisions of the TRIPS Agreement being advanced by some developed countries. They expressed concern that such restrictive interpretations would unduly limit their rights to undertake the full range of public health policy measures, for fear of legal challenge either in domestic courts or before the WTO dispute settlement mechanism.

Most countries during the Special Discussion, including a number of developed countries, expressed support for the proposal for a clear statement by the WTO Ministerial Conference in November. The European Communities (EC, the official name in the WTO for the European Union) welcomed the Special Discussion as a means for laying the ground for a ‘fruitful process’ towards Doha. Norway’s statement (which many regarded to be the most forthcoming and developing country-friendly among the statements of the developed countries) suggested that developed countries should exercise due restraint with respect to dispute settlement actions, until legal certainty on the TRIPS provisions was achieved.

Towards the end of the morning session, many developing-country delegates were hopeful that there would be consensus on the way forward. The US statement, due after the lunch break, was keenly awaited. However, it turned out to be a disappointment.

The US statement seemed furthest away from the general line taken by the majority of the countries. In taking the position that strong patent regimes can produce benefits for countries, whether they be developed or developing, the US refused to acknowledge the concerns of developing countries over TRIPS implementation and access to affordable medicines.

The TRIPS Council had agreed to hold the Special Discussion amidst growing public pressures - from developing countries and their governments, public health and civil society groups in the South and the North - to address concerns that implementation of the TRIPS Agreement is having and will continue to have negative consequences on access to, and availability of, affordable medicines.

The follow-up process

The TRIPS Council heard over 40 statements from Members during the Special Discussion, which finally concluded at around 8.00pm on 20 June.   By the end of the session, it was clear that the majority of the countries regarded the Special Discussion as only the start of a continuing process, with a tangible result expected at the end.

The next day (21 June), the Chairman of the TRIPS Council, Ambassador Boniface Chidyausiku of Zimbabwe, held informal consultations with Members for their views on the way forward. On the last day of the TRIPS Council meeting (22 June), Members agreed to an informal meeting scheduled for 25 July, for further discussions (see pp. 26-29 for reports on the 25 July meeting). It is expected that a checklist of issues would be presented to Members to guide their discussions. It was also agreed that the TRIPS Council would hold another one-day Special Discussion on 19 September as part of its next formal meeting.

Interpretation of TRIPS and public health

The most significant aspect of the TRIPS Special Discussion was that developing countries came well prepared and put up a strong case for:  (a) urgent action in the WTO to address the TRIPS-drugs issue;   (b) an interpretation of the TRIPS Agreement that enables national public health measures. The common understanding by so many developing countries is important because their joint and individual affirmations of their interpretation of the TRIPS Agreement in relation to public health provide an important basis that these interpretations are those of the WTO Members.  In the event of a dispute, the common interpretation of so many Members could have a bearing.

Joint call for action

The joint developing-country paper reflected a common view among developing countries for the WTO to take urgent action to address mounting concerns over the relationship between patents and access to medicines.  Many developing countries took the floor to express their support for the joint statement. A number of the co-sponsors of the statement, including Brazil, Egypt, India, Indonesia, Kenya, South Africa, Tanzania and Thailand, also presented their individual statements. The common theme within these various statements was the need for action by the Doha Ministerial Conference.

Zimbabwe, which spoke on behalf of the Africa Group representing 33 African Members of the WTO, proposed that the Doha Ministerial Conference issue a special declaration to affirm the Group’s common understanding that the TRIPS Agreement does not prevent Members from taking measures to protect public health.

Malaysia, speaking for the Association of South-East Asian Nations (ASEAN) countries, welcomed the developing-country paper and expressed its support for the call for action to be taken by the Ministerial Conference. The ASEAN countries said it was important for Members to recognise the rights accorded to them within the TRIPS Agreement to take measures to protect public health, and proposed that language for a common understanding of these rights be worked out for the Ministers’ endorsement in Doha.

Common interpretation of TRIPS flexibility

The joint developing-country paper referred to provisions in the TRIPS Agreement having been drafted with ‘room to manoeuvre’ to serve the purpose of accommodating different positions of Members, and said that this may elicit different interpretations of the Agreement. The paper urged the TRIPS Council to confirm, as soon as possible, the understanding that the TRIPS Agreement did not limit or reduce the range of options available to governments in promoting public health and ‘other overarching public policy objectives’. This was required to prevent a situation of legal uncertainty.

The need for legal certainty was supported by South Africa, which recounted its experience defending its health legislation against legal challenges by the drug companies and a ‘major trading partner’ (i.e., the US). Both challenges have been withdrawn. South Africa said both challenges had demanded ‘TRIPS-plus’ (i.e., going beyond the obligations set under the TRIPS Agreement) legislation.

The Africa Group, in its statement, also supported the need for certainty, stating that ‘this assurance and guarantee was needed to enable governments to adopt such measures (to protect public health), without fear of litigation, at national level or at the WTO, or bilateral pressures being applied on them’.

In asserting their common understanding of the TRIPS Agreement, the developing countries also set out their reading of specific provisions in the Agreement. The various submissions of the developing countries shared many common elements, and these are summarised below.

·        Provisions of the TRIPS Agreement must be read in light of the Agreement’s objectives and principles as set forth in its Articles 7 and 8, to ensure a proper balance between patent protection and overarching public policy objectives, including the need to protect public health and to ensure access to medicines.

·        The TRIPS Agreement does not limit the grounds on which governments may issue compulsory licences. Compulsory licences are essential tools for carrying out public health policies by facilitating access to medicines through the prevention of abuses of intellectual property rights, through promotion of domestic capacities for manufacturing pharmaceuticals and in cases of national emergency or other circumstances of extreme urgency or of public non-commercial use.

·        Members have the unconditional right to determine the way in which exhaustion-of-rights regimes are applied in their jurisdictions, by virtue of Article 6 of the TRIPS Agreement, and thus the right to enable parallel-import measures within national legislation.

The developing countries were also agreed that whilst differential-pricing proposals (see pp. 38-42) could be part of a broader set of initiatives to improve access to medicines, such proposals should not be included within the deliberations of the TRIPS Council. More importantly, differential-pricing schemes or methods should in no way be used to limit the flexibility permitted under the TRIPS Agreement in any of its provisions.

The Africa Group added that developing countries should be allowed a reasonable period of time to put into place legal frameworks which properly reflect their understanding of the TRIPS provisions.

For many of the developing countries, the implementation process still required development of capacity and expertise so as to enable formulation of laws and policies which were consistent with their national priorities and needs. The Group therefore proposed an extension of the transition period for the implementation of developing countries’ TRIPS obligations in relation to patent protection (both product and process) regarding pharmaceutical drugs. (The joint developing-country paper also called for extension of transitional periods, as foreseen in TRIPS Articles 65.4 and 66.1.)

In addition, the Africa Group also called for the Doha Ministerial Conference to adopt a moratorium on actions in the dispute settlement mechanism against measures taken by Members to protect public health, so as not to hinder their ability to promote access to medicines and protect public health (including through compulsory licensing and parallel imports).

In putting forth their common reading and understanding of the TRIPS provisions, the developing countries have shown a great deal of commonality in their interpretation of the TRIPS Agreement.

There were also references to a revision of the TRIPS Agreement. The joint developing-country paper made it clear that ‘Where the provisions of the Agreement may be considered insufficient to protect public health, Members may wish to bring further proposals for modifications in the Agreement, with a view to increase its flexibility’.

Developed countries responses

European Union

In its submission, the EC welcomed the process to address the link between intellectual property and health policy, and expressed its full commitment to finding solutions to the problem of access to affordable medicines in developing countries, including a reference in the Doha Ministerial.

Remarking on the tone of the statement, commentators said that it was a significant change from the EC stance a year ago. However, it was clear from its statement that the EC was not prepared to discuss any downgrading in the current level of intellectual property protection required by the TRIPS Agreement. On other substantive issues, the EC statement appeared to agree with the developing countries on a number of points.

Articles 7 and 8, the EC said, were important for interpreting other provisions of the TRIPS Agreement, including ‘where measures such as compulsory licences were taken by Members to meet public health objectives’.  The EC also agreed that Article 6 of TRIPS enables Members to allow for parallel imports of patent-protected goods, but added that a global tiered-pricing scheme for medicines would require measures to prevent tiered-priced drugs from ‘popping up in rich-country markets’ - implying limitations on parallel-importation measures.

On the question of compulsory licences, the EC said that Members should be able to make use of the provisions of the Agreement on compulsory licensing (Article 31) without fear of challenge, adding that compulsory licences can be issued for any reason, so long as the procedural requirements in Article 31 were respected. On whether compulsory licensees could produce for export, the EC said the Agreement did not offer any legal certainty on the issue, but expressed its willingness to find solutions that could gain consensus among Members.

Norway

Among the developed countries, Norway was perhaps the most supportive of the  position of developing countries. On the link between patents, price and access to medicines, Norway said price was not the only issue for access to medicines, but ‘price does make a difference’. This was especially true in the case of poor people in developing countries who have to pay out of pocket for healthcare, including for medicines.

On the issue of differential pricing, Norway agreed with the developing-country view that it should not be used as an argument for not interpreting the TRIPS Agreement as flexibly as possible in the area of public health. 

According to Norway, the aim of the Special Discussion was to seek more legal clarity on the provisions of the TRIPS Agreement. In this regard, Members must examine carefully the relevant provisions of the Agreement, and take into account its objectives and principles as set out in Articles 7 and 8. Norway called on developed countries to exercise restraint until the required degree of legal certainty was achieved.

The US

The basic premise of the US position was that in establishing standards for patent regimes, the TRIPS Agreement strikes a proper balance between offering incentives for innovation and ensuring access to medicines. Unlike almost all other statements at the Special Discussion, the US paper did not refer to the use of Articles 7 and 8 in interpreting the TRIPS Agreement, leading some commentators to conclude that the US did not agree with the majority opinion expressed by the other Members.

The US asserted that flexibilities were inherent within the TRIPS Agreement, citing the transition period for developing-country Members as one of the most significant flexibilities contained in the Agreement. In this context, the US also issued a challenge to countries to justify proposals for extension of the transition periods, since Members which have not had the experience of implementing the TRIPS Agreement could not have seen the impact the Agreement will have on their healthcare regimes.

It also took the position that Article 6 of the Agreement, which stipulates that the provisions of TRIPS could not be used to settle the issue of exhaustion of rights for dispute settlement purposes, did not authorise parallel imports. This was, again, out of line with the other Members’ reading of the same provision.

Although the US paper agreed with others that Article 31 of the Agreement does not itemise the purposes for which compulsory licences may be granted, it made clear its view that compulsory licences for ‘non-working’ (i.e., no domestic exploitation of a patent) were not allowed. Referring to the need to read Article 31 with Article 27.1 (which prohibits discrimination, for the grant of patent rights, between products locally produced and imported), the paper concluded therefore that ‘importation of a product rather than domestic production cannot justify the grant of a compulsory licence’.

In a comment clearly directed at civil society groups and NGOs (and perhaps some international organisations), the US paper also encouraged Members to refer to the WTO website for documents highlighting how the TRIPS Agreement has struck a proper balance between rewarding innovation and access to healthcare. The paper asked Members to ‘avoid documents circulated by other individuals and organisations that lack the WTO’s expertise’.

This comment led some observers to say that the ongoing civil society campaigns on TRIPS and access to medicines may finally have begun to affect the US. 

Developing countries’ reactions

SPEAKING at a media briefing towards the close of the Special Discussion, Mr Tadeous Chifamba from the Zimbabwe Mission in Geneva said that the African countries had put forward their interpretation of the TRIPS Agreement in the Africa Group statement. He added that other developing countries had also affirmed this interpretation of the TRIPS Agreement in their statements during the day’s proceedings.

The next step, Mr Chifamba said, was for the Africa Group to work towards having this interpretation affirmed by the Ministerial Conference in Qatar.

Asked for his response to the US statement, Mr Chifamba said he had been disappointed. He cited the US position that the compulsory-licensing provision in Article 31 should be read with Article 27.1. ‘This limits the flexibility for Members to issue compulsory licences. There is reference to Article 27.1 but not Articles 7 and 8,’ he said. He added that he would need to carefully study the reference to parallel importation, ‘as what it is saying would nullify or prohibit the use of parallel-import measures’.

The Director of the Brazilian AIDS Programme, Dr Paulo Roberto Teixeira, agreed. He said that the US statement reflected a very ‘strict’ interpretation of the TRIPS Agreement. ‘This statement has sent countries like Brazil a very clear message: that compulsory licences under Article 31 cannot include the objective to develop national production of medicines,’ he added.

Mr Mohan Kumar, of the India Mission in Geneva, said that the Special Discussion was the beginning of a process. It was an accomplishment of the meeting that all the relevant issues had been placed on the table. ‘A large number of delegations have expressed their views and this gives us a good sense of the positions. We look forward to further consultations with a view to achieving something tangible in Doha,’ he said.

The delegate from Egypt, Professor  Bahaa  Fayez,  said  he  had been encouraged by the proceedings. ‘Changes will be forthcoming because frank and candid exposures of the problem have been tabled,’ he said. He added that it was positive that the issues raised and discussed during the Special Discussion were not only those relating to the inherent flexibilities embedded in the TRIPS Agreement itself, but also included issues such as the call for a moratorium on dispute settlement actions against developing countries.

Mr Chifamba said that the process started at the TRIPS Council is not operating within a vacuum. ‘There are other organisations which are also actively working on the issues related to access to medicines. What will be important are long-term solutions,’ he said.

He further added that, within the WTO, there were also other processes within which the issue could be addressed. He referred to the review of the TRIPS Agreement under Article 71.1 as one example.

Mr Chifamba concluded: ‘Qatar cannot afford to fail. The Ministerial Conference should send a clear, unambiguous message that international patent protection  does not prevent Members from taking steps to protect public health and to ensure their citizens’ access to medicines’. 

                        

Behind the EC’s ‘positive’ stance

DURING a press briefing, the EC Ambassador, Mr Carlo Trojan, repeated the EC’s willingness to consult and dialogue with other Members, particularly on the problems of small economies and their difficulties in issuing compulsory licences for production when their own markets were too small to absorb such production. The developing countries had made it clear in their statements that it was within their rights to issue compulsory licences for the ‘working’ of a patent within their territory, for foreign suppliers to provide medicines in the domestic market, and for the supply of foreign markets.

When asked about the developing countries’ proposal for a declaration at the Doha Ministerial Conference, the EC said that it favoured ‘preambular language’ in the Doha Ministerial Declaration that would clarify the grounds of public health exceptions. It should be clarified whether such preambular language would have less status than the operative text of a declaration.

While many delegates were encouraged by the ‘positive’ approach taken by the EC, there were also concerns that the EC had not taken a hardline stance only because it did not want to risk the debate on the TRIPS-and-public-health issue taking centre-stage and jeopardising its attempts to launch a new round of multilateral trade negotiations at Doha. Indeed, the issue of the new round was brought up at the press briefing, when the EC Ambassador took the opportunity to point out that the US and EC have now agreed on the launch of a new round.

It has also been suggested that the TRIPS-and-public-health issue could later be used as part of a negotiating strategy, to be traded against other issues in the context of a new round with new issues. The EC has said previously that developing-country demands in the agriculture negotiations could not be addressed, save in the context of a new round. The same approach may be taken here.

It must also be taken into account that the EC, and even more strongly the US and Switzerland (and other industrial countries), have made clear that they will not agree to any diminution in the current standard of intellectual property protection. It remains to be seen how much scope these countries would be prepared to accept with respect to the use of measures such as compulsory licences. The US, in particular, has said that the use of compulsory licences will have negative implications for patent systems.

In this regard, it is a possibility that other proposals, such as the Global Health Fund and differential-pricing schemes, may be offered as substitutes to developing countries in place of decisions on the TRIPS Agreement.

 

 

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