Healthy Skepticism Library item: 10740

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Publication type: news

Ratification of TRIPS health amendment languishes, with five months to go.
Bridges Weekly Trade News Digest 2007 Jun 27
http://www.ictsd.org/weekly/07-06-27/story4.htm

Full text:

One and a half years after governments agreed on how to amend WTO intellectual property rules to allow poor countries to import cheap generic versions of patent-protected medicines, only seven of the global trade body’s 150 Members have ratified the controversial amendment.

For the amendment to enter into force on schedule, two-thirds of WTO Members – some 100 countries – need to ratify the changes through their respective domestic political procedures by 1 December. Thus far, only 5 percent have done so: the US, Switzerland, El Salvador, Korea, Norway, India, and the Philippines.

Members agreed on the formal changes to the WTO Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) in December 2005. Although supporters hailed the deal as proof that the trading system could address humanitarian and development concerns, Médecins sans Frontières (MSF) warned at the time that the amendment, which would take the form of an ‘Article 31bis’, was “based on a mechanism that has failed to prove it can increase access to medicines” (see BRIDGES Weekly, 7 December 2005).

The mechanism in question was the temporary ’30 August 2003 Decision’ — a waiver that spells out the conditions under which Members are allowed to issue compulsory licences to produce and export cheap generic copies of drugs still under patent to developing countries that lack the capacity to manufacture the medicines they need (see BRIDGES Weekly, 4 September 2003). These administrative conditions have been criticised for being so complex as to render the system useless: in the nearly four years since its adoption, the 30 August 2003 Decision has not once been used to import drugs, although some argue that it has strengthened governments’ hand when negotiating lower drug prices with pharmaceutical companies.

The 30 August 2003 Decision was supposed to be replaced by a negotiated amendment to the TRIPS agreement within six months. The amendment that was finally agreed to more than two years later essentially makes permanent a questionably effective – but changeable – status quo, by translating the temporary waiver into WTO law.

Until the amendment is ratified by enough Members, the 30 August Decision will remain in force, even past the 1 December deadline. If missed, it is possible that this deadline could simply be extended.

The European Parliament is now debating whether to ratify the TRIPS amendment. Several parliamentarians are unhappy with it, albeit for opposite reasons: some want the rules tightened to prevent cheap generics from being diverted into rich country markets; others want to ease the administrative burden for countries trying to use the amendment, so as to safeguard access to medicines.

The EU and its parliament do not have the power to unilaterally change the amendment; this would involve a new negotiation with all other WTO Members. However, Frederick Abbott, a professor of international law at Florida State University, told Bridges that “the most likely result of an attempted re-negotiation would be an impasse.” Moreover, he said that it was far from clear that a new compromise would make it easier for poor countries to import affordable drugs. “There is about an equal chance, if there were renewed negotiations, that the rules would become more or less restrictive,” he opined.

Abbott pointed out that the amendment’s lack of restrictions on the scope of diseases covered represented a major victory for developing countries, which could otherwise have seen their ability to import generics limited to drugs for, say, HIV/AIDS, malaria, and tuberculosis. The open scope of the amendment, he added, would be even more controversial in renewed negotiations following the Thai government’s January decision to issue a compulsory licence for Plavix, a blood thinner used to treat a non-communicable heart disease (see BRIDGES Weekly, 31 January 2007).

Nor does support from some members of the European Parliament mean that Brussels would push for relaxing the amendment’s stringent administrative conditions — indeed, the EU pushed for many of these restrictions during the original negotiations at the WTO. However, Abbot predicted that if the EU, with its 27 member states, ratified the TRIPS amendment — pushing the total number of WTO Members that have done so to 34 — more countries would follow.

In a report on access to medicines commissioned by the EU, Abbott and Jerome Reichman, a law professor at Duke University, acknowledged that the TRIPS amendment was “not the straightforward and expeditious solution initially sought by developing countries.” Nevertheless, they said that ratification by the EU would provide a “net benefit” in terms of access to medicines in developing and least-developed countries. Pointedly, they expressed “serious concerns that industry interests and supporting governments would use delay or failure of acceptance of the amendment as the basis for an aggressive lobbying campaign intended to undercut the vitality of the waiver.”

The two legal scholars warned that making Article 31bis functional would require vigilant and deliberate government action, including a “combination of political will, good lawyering, financial support for appropriate implementation efforts and collective action.” They said that the effectiveness of the amendment could be enhanced through regional cooperation on procurement and compulsory licencing, as well as the creation of funding mechanisms other than patent rights to encourage the development of new drugs.

MSF’s Alexandra Heumber urged the European Parliament to postpone ratification while negotiating with the Commission and EU member states to put in place policies to promote access to medicines. Echoing a point made by Abbott and Reichman, she said that WTO Members seeking to assist developing countries could use Article 30 of the TRIPS Agreement, which authorises governments to make limited exceptions to patent-holders’ rights (so long as they do not “unreasonably conflict” with the patent’s exploitation).

Irrespective of whether the amendment enters into force on time, Heumber noted that explicit political support from Western governments for the use of compulsory licencing would be essential.

Despite clear WTO rules protecting Members’ ability to issue compulsory licences suspending patents (set out primarily in TRIPS Article 31), developing countries face considerable pressure from the pharmaceutical industry and some governments not to do so. This was demonstrated by the uproar over Thailand’s and Brazil’s separate decisions to issue compulsory licences for a handful of drugs (see BRIDGES Weekly, 9 May 2007). Some European governments and political parties, including France, the UK, and Spain, did express support for the action taken by Brazil and Thailand.

Importantly, neither Brazil nor Thailand had to resort to the 30 August Decision to issue the licences: Brazil had the capacity to manufacture the HIV/AIDS drug efavirenz, and Thailand was planning to import generic copies of the same drug from India – where it is not patented – until generic production came online (see BRIDGES Weekly, 13 December 2006).

In any event, Greg Perry from the European Generic Medicines Association points out that for the TRIPS amendment to have “any hope of success,” developed countries will have to truly recognise that governments do not need to consult with patent holders when issuing a compulsory licence for national emergencies or public non-commercial use, and that governments have the right to define what constitutes an emergency.

ICTSD reporting.