TWN Info Service on Intellectual Property Issues (Feb09/01)
2 February 2009
Third World Network

Please find below a news report on the outcome of discussion in WHO on "Counterfeit Medical Products".

WHO Secretariat is to come up with a new report to be sent to the World Health Assembly in May 2009. EB 124/14 which contained the Secretariat's report and draft resolution has been dropped due to significant opposition from several developing countries.

Best Regards
Sangeeta Shashikant
Third World Network

WHO: Concerns voiced over IMPACT, Secretariat's role on "counterfeits"
SUNS #6627 Wednesday 28 January 2009

Geneva, 27 Jan (Sangeeta Shashikant) -- Many developing countries voiced concerns at a meeting of the Executive Board of the World Health Organization (WHO) over the Secretariat using the term "counterfeit" to describe problems relating to the quality, safety and efficacy of medical products, and addressing such problems through the International Medical Products Anti-Counterfeit Taskforce (IMPACT).

At a meeting of the Executive Board on 23 January, Latin American (grouped under GRULAC) and Southeast Asian countries (called SEARO) as well as Iran and Egypt were concerned that the term "counterfeit", used in connection with IP violations particularly trademark infringements, would result in the WHO addressing health concerns through IP enforcement measures.

Concerns were also raised over the WHO's anti-counterfeit taskforce IMPACT, which many countries felt was unsuited to address the issue of quality, safety and efficacy (QSE) of medical products because its establishment lacked a mandate from the WHO's governing bodies; its emphasis on "counterfeits"; the involvement of the private sector in its activities thus raising issues of conflicts of interest; and lack of transparency.

The Africa Group, recognizing alarm among some countries over the use of the term "counterfeit", recommended improving its definition.

Malawi spoke of the need perhaps to come out with another word to replace “counterfeit”.  It also recognized concerns raised about IMPACT but stressed the need to come up with measures to deal with substandard medicines. Strong views were expressed against the Secretariat's report and draft resolution attached to the report contained in EB124/14 entitled "Counterfeit Medical Products". This resulted in the rejection of the documents.

The documents presented by the Secretariat featured counterfeit as a severe health problem distinct from IP issues and sought endorsement for IMPACT and its activities.

Analysis of the Secretariat's report and attached draft resolution suggests that the documents may potentially become a problem for the prompt availability of affordable generic medicines (See SUNS #6623 dated 22 January 2009 and SUNS #6618 dated 15 January 2009.)

The debate at the Executive Board resulted in significant convergence among most developing countries present that more efforts need to be made to strengthen the drug regulatory authorities - which tend to be weak in developing countries ­ to address QSE through WHO with guidance from member states.

Noting the unease and dissatisfaction with the approach taken by the report and draft resolution, on the suggestion of WHO Director-General Dr. Margaret Chan, it was agreed that WHO would prepare a new report (without a resolution) for member states' consideration at the World Health Assembly (WHA), which would address the public health dimension of the issues and what WHO is doing to strengthen the DRA (Drug Regulatory Authorities). In this regard, it would also look at the Global Strategy and Plan of Action (GSPOA) on Public Health, Innovation and Intellectual Property.

At the request of Thailand, Dr Chan also agreed to prepare another report that would investigate issues of conflicts of interest among members of IMPACT.

However, the agreement was preceded by a push from the Chair of the meeting (Sir Liam Donaldson of the UK), the EU and the Swiss delegation for either an informal working group or some outcome on the issue of counterfeits, despite the apparent dissatisfaction among Executive Board and non-Executive Board members with document EB124/14 prepared by the Secretariat.

Sir Liam, on one occasion drew parallels with the draft resolution on "The grave health situation caused by Israeli military operations in the occupied Palestinian territory, particularly in the occupied Gaza Strip", and said that sometimes content did not matter and that agreement was needed more as a symbolism so as not to give comfort to counterfeiters. He argued that it might be possible to agree to a shorter resolution.

Hungary, on behalf of the EU, the UK and Switzerland showed strong support for setting up an informal working group to work out an outcome for the Executive Board. The US suggested the possibility of an intergovernmental meeting prior to the WHA to take the issue forward.

However, such a push was resisted, and resulted in sharp responses from many of the developing countries participating in the meeting as Executive Board members and observers.

Paraguay, on behalf of GRULAC, issued a declaration reiterating its readiness to deal with the medicines policy as WHO is the appropriate forum for QSE of medical products as long as it respects national legislation. It added that adulteration of medicines, absence of objective measures and non-compliance with good manufacturing practices are themes of concern and must be dealt with to ensure QSE of medical products and should be based on scientific and health evidence.

However, it stressed that WHO is not the appropriate forum for observance of IPRs and that "counterfeit" pertains to infringement of IP rights, particularly trademarks and has nothing to do with health concerns. WHO should guide discussions on health issues and not deal with issues that are the purview of other fora. It further stated that actions should be adopted after a process of negotiations among Member States that includes the strengthening of the health authorities responsible for regulation of medicines.

Brazil, in opposing the draft resolution, voiced deep concern over the QSE of medical products, adding that it has been working to combat falsification and all forms of illegality. It emphasized that WHO is the forum for debate of methodologies focused on QSE of medical products and should help Member States to strengthen their DRA. It added that WHO is not a "forum for discussions on enforcement of intellectual property rights". It said that any norms or definitions set to deal with QSE of medical products have to be inclusive, evidence-based and done through a Member State-driven process.

Brazil highlighted the recent seizure by the Dutch port authorities of an Indian shipment of generic drugs Losartan (for arterial hypertension), while it was in transit to Brazil as a concrete example of the negative impacts of the relationship between health issues and enforcement of IPRs.

In relation to this case, Brazil also read a joint statement by its Minister of Foreign Relations Celso Amorim and the Minister of Health, Dr. Jose Gomes Temporao, which states: "The decision to retain the shipment - which was not, at any moment, brought onto Dutch territory - was undertaken as a result of an administrative request from a third company (therefore, without the official endorsement of the local judiciary system) which allegedly owns intellectual property rights over LOSARTAN in the Netherlands" and that this "process imposes on the supplier, and not on the company which requested the intervention, the responsibility to prove the legality of the transaction, essentially an inversion of the universally accepted juridical concept that the accusatory party must present the evidence."

The statement said that "Irrespective of the value or volume involved, or of the fact that the shipment was returned to the country of origin (India), the Brazilian Government considers that the decision by the Dutch authorities to detain an input which is strategic to public health in a developing country, and exported in conformity with the existing international norms, represents a grave drawback in the treatment of the issue of the universal access to medicines" and "represents a distorted use of the international intellectual property system, supposedly upheld by European Union legislation, and contrary to the spirit and provisions of the Doha Declaration on TRIPS and Public Health." The statement added that "this is the sort of procedure that this Organization should oppose firmly".

Brazil said that the case must be seen in light of the direction which the IMPACT initiative has taken, i.e. under the pretext of a fight against counterfeit medicines, it attempts to impose a revision of WHO's position on the issue, with a view to inhibit the legitimate commerce of high quality, competitively priced generic drugs. Brazil stressed its dissatisfaction with the action undertaken in the port of Rotterdam, which it said raised doubts with respect to the commitment of European countries to the issue of access to medicines by developing countries. It added that the action may also be taken up in the WTO.

Brazil also stressed the primacy of health over trade, as well as the right of countries to fully use the flexibilities of the TRIPS Agreement to guarantee universal access to medicines, as reaffirmed in WHO's GSPOA on Public Health, Innovation and IP.

Indonesia, on behalf of SEARO countries, also could not accept document EB124/14. While fully committing to combat drugs that do not conform to QSE, Indonesia questioned the legitimacy of IMPACT, adding that "we are still unclear if the Rome Declaration was subsequently discussed, recognized and endorsed by the EB and WHA to frame the terms of reference or decide on the establishment of IMPACT's function and membership".

Indonesia said that SEARO countries "do not accept" particularly the Principles and Elements for National Legislation (Model Elements) produced by IMPACT, since the process has not been inclusive, and it is the "sovereign" right of countries. It also stressed that the focus should be on the strengthening of the DRA and any discussion on this should be intergovernmental in nature.

Bangladesh also expressed concerns about treating "counterfeit", a term used in relation to IP violations particularly trademark violations, as a public health issue. It added that there was a need for better understanding of the problems and its root causes. It also said that without independent verified data, it may be premature to consider the issue. It further said that the approach to the issue, i.e. taking authority away from the DRA and placing it in the hands of the law enforcement agencies which have no idea or capacity to evaluate QSE of medical products, may in fact affect drug supply.

Bangladesh also raised concerns over IMPACT and its activities, and said these are not sufficiently member-driven and has a high involvement of the private sector, raising concerns about conflicts of interest, especially since organisations participating in IMPACT are also engaged in IP protection and enforcement.

Bangladesh also raised apprehension with regard to the new definition that emanated from the recent IMPACT meeting in Tunisia, adding that the definition lacks precision and may well have serious adverse impacts on the access to drugs since it may include legally produced generic drugs.

It further stated that any definition should exclude all IP infringements. It referred to Secretariat’s report which states that the proposed definition “will serve as a model text for national legislation”, adding that if so it has to be a definition by member states and not by IMPACT since an inaccurate or misleading definition could have impact on developing countries and its industries.

It stressed the importance for developing countries to retain as much policy space as possible, and concluded stating that it could not support WHO's report and the draft resolution as it focuses on combating counterfeits as an end in itself rather than as a public health effort.

Niger, on behalf of African member states, expressed difficulty in getting the right information about the magnitude and extent of the "counterfeit" problem. It added that most low-income countries do not have DRA. It also stressed the need for a better definition and exchange of information.

[Several African country delegates participating in the Executive Board meetings have privately pointed out that in using the term "counterfeit", they intend to protect against medicines with no or wrong active ingredients (spurious medicines) and medicines of low quality (substandard medicines) and that their intention on this issue is not to protect or enforce IP rights - see SUNS #6623 dated 22 January 2009].

Hungary, on behalf of the EU, said that this issue was a "priority" for the EU, adding that the new EU draft legislation is based on IMPACT's Model Elements and that the fight against counterfeit required international action based on clear principles and cooperation between the police, banks and customs. In this regard, WHO has the coordinating role.

The US showed strong support for IMPACT.

UAE spoke in favor of the Report and draft resolution while Oman sought clarification as to whether one of the causes for the increase in counterfeits was the patent system which allows patents to be valid for 20 years.

Switzerland said that while it was better to change the term "counterfeit" it wondered whether this was politically feasible. It stressed that one must use "counterfeit medical products" which is not the same as "counterfeits". It further said that it did not hear criticisms on the quality of technical work of IMPACT.

Sir Liam, the chair of the Executive Board, picked up the possibility of a small informal drafting group and sought to push it forward. However, the Chair's push for a small drafting group and a short resolution was resisted, and in fact resulted in sharp responses from many of the developing countries participating in the meeting as Executive Board members and observers.

India, aligning itself with the SEARO statement, reiterated concerns of how non-tariff barriers are used to obstruct access to cheap good quality and affordable medicines. It opposed the formation of any group to discuss the issue until WHO came out with documentation with regard to medicines which are "substandard", "falsely labeled" and "spurious".

Iran also voiced strong concerns over document EB124/14, i.e. if considered, it will result in a strong mandate on "counterfeit" in relation to IP and an endorsement of IMPACT. It added that it could not accept either outcome.

It also reiterated that “counterfeit” which pertains IP violations are not per se quality problems and not an issue for WHO. It stressed on the need to focus on the issues of false labeling, substandard and spurious medicines and avoid issues of IP enforcement.

Iran also asserted that IMPACT definition of “counterfeit” in Secretariat’s report opens the possibility of using health concerns as a means for IP protection and enforcement and that IMPACT’s Model Elements would hamper access to medicines and achieving self sufficiency in manufacturing.

Iran further raised issue about the highly unbalanced participation in IMPACT and the lack of full transparency, stressing that members need to avoid hasty action amounting to endorsement of IMPACT and its views on counterfeit.

Venezuela voiced objection to the use of the term "counterfeit" on the basis that its connotation can be misleading. It added that IMPACT's definition and proposals can be used as a front for protectionism and might amount to a barrier to countries wishing to develop self-sufficiency in manufacturing. It expressed the view that direct financing by special interests and the stress on law enforcement interfered with sovereign matters. It rejected outright IMPACT's policies.

Thailand also said that it could not support EB124/14 and especially IMPACT's Model Elements. It however added that it could support strengthening DRA and having a discussion on this issue.

Argentina also mentioned that WHO is not the appropriate forum for enforcement of IP rights, adding that the TRIPS Agreement contains a definition on "counterfeit" and that it was not appropriate for WHO to draw up an additional definition. It also said that it did not support harmonization on this issue and urged the Executive Board not to recommend to the WHA the adoption of the resolution.

Ecuador raised similar concerns adding that WHO should direct its work toward QSE within the context of public health and respecting national legislation, as it was not the appropriate forum for enforcement of IP rights.

Egypt said that recently there has been a lack of clarity as to what WHO's activities have been and should be in relation to QSE of medical products, adding that there is a growing sense of unease about IMPACT, an initiative not enjoying a mandate from WHO's governing bodies.

It asked Executive Board members: "Are we discussing public health problems, or are we, as has recently been witnessed in other intergovernmental fora in specialized agencies of the United Nations and other IGOs, witnessing an importation of a specific IP enforcement agenda into the WHO?"

Ensuring quality of drugs requires utmost attention and should be handled through DRA and WHO has a role to play in supporting DRA, but on the other hand, counterfeit is a trademark violation, which should be dealt with under relevant IP laws, it added. It further stated that WHO should pay attention to finding solutions, not through the lens of IP, but health.

It also said that substandard products represent a far larger risk and these classes (i.e. counterfeit and substandard) must not be confused particularly at the WHO.

Egypt also highlighted concerns over IMPACT, i.e questions of representation, and on the quality and objectivity of data including statistics used. It added that IMPACT has no mandate to pronounce on issues prerogative of national legislation and that neither the draft resolution nor the report is a positive way forward.

Egypt also responded to Chair’s remarks on the Gaza draft resolution stating that the resolution is a valid contribution that it expects WHO to work on.

Chile said that on substance this is not an IP problem but one of poor quality, substandard, falsely labeled and unapproved products not in compliance with QSE.

As to form, it alluded to the problem of transparency, insufficient documents, and unclear funding as well as IMPACT meetings held everywhere except in Geneva, adding that to give legitimacy to the issue it has to be dealt with in WHO or at least a group established by EB or WHA.

It referred to a definition that emerged in 1992 but not adopted by member states and spoke of the need for a definition which would be to everyone’s satisfaction, recognize the problem, adding that this issue cannot be resolved in a working group in an EB session.

Bahamas added there were many assumptions made about regulatory capacity in EB 124/14, stressing that it was important to know what WHO was doing to focus on public health aspects particularly as it relates to member states’ countries regulatory capacities. Neither criminal nor trade activities are managed by health it added and that there was a need to remove all references to criminal and trade aspects from the report.

Dr. Carissa F. Etienne, Assistant Director General of Health System and Services attempted to reiterate the same old arguments of WHO found in the Secretariat’s report in response to many of the interventions made i.e. that counterfeiting is a public health problem and that there were statistics on it, adding that counterfeit in WHO referred to patients that were the victims.

Dr. Etienne also said that IMPACT’s secretariat lies in WHO and attempts to bring stakeholders together and that the Secretariat will make IMPACT more transparent.

However countries simply could not accept Dr. Etienne’s explanation.

Bahamas said that it expected a more specific response as to what WHO itself has been doing to provide technical support to countries in the region.

Bangladesh responding to the suggestion of the Chair on an informal drafting group and to WHO Secretariat said that since it does not accept the underlying premise of EB 124/14, there cannot be an effective discussion on the matter, and urged the Chair to recognize its unease and dissatisfaction with EB 124/14.

In response to Switzerland, Bangladesh said it was questioning the legitimacy of IMPACT and thus how was it able to critique IMPACT’s work.

Brazil also expressed its dissatisfaction with EB 124/14, adding that the issue was not about whether the resolution was big or small, but it was not clear what was meant by “counterfeit” in the context of WHO’s mandate.

It also said that the Secretariat’s report builds on the technical work done by a group which is not a member driven group and that member states don’t know whether IMPACT when it deliberates takes into consideration the relevant guidelines and issue such as high prices, and its impact on counterfeits.

It also cautioned the Secretariat that it would not like too see WHO being taken over by the Interpol or the police.