TWN Info Service on Health Issues (Oct15/13)
22 October 2015
Third World Network

Poor countries press for extension of exemption from drug
(Published 20 October 2015)
Anne Gulland

Developing countries are still waiting to hear whether they will be granted a permanent exemption from rules on intellectual property that enables them to have access to generic drugs.

No agreement was reached after two days of talks at the World Trade Organization on 15 and 16 October, and the decision on the exemption will be deferred to next month.

Since the launch of the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement in 1995, low income countries have been exempt from intellectual property rules on some items such as drugs. The exemption, which enables poor countries to export and produce generic drugs regardless of patent, has been granted on a time limited basis, and the current waiver is due to expire in January 2016.

The 48 countries classed as the world's least developed have called for the waiver to be extended as long as the countries still meet this classification, as defined by the United Nations. The non-governmental aid organisation Medecins Sans Frontieres has said that this would help safeguard affordable access to drugs for millions of people in countries such as Nepal, Bangladesh, Myanmar, Liberia, Haiti, and Lesotho.

MSF said that the ending of the waiver would discourage producers of generic drugs from investing in developing countries. Rohit Malpani, director of policy and analysis at MSF's access to medicines campaign, said, 'It's becoming increasingly hard to convince companies to develop drugs that are relevant to developing countries or even manufacture and distribute drugs they are already making to developing countries.

'We spend a lot of time trying to persuade companies to focus on these markets, and the possibility that intellectual property will come into play is a big disincentive for them to invest.

He added that the axing of the exemption could mean that ณsome companies may decide that these are markets they no longer want to invest in.ฒ

The countries most against the exemption, the United States, Canada, and Australia, did not publicly signal their intention over it before the meeting, but Michael Punke, US ambassador to the World Trade Organization, met ambassadors from 15 of the affected countries, where he said that the US could not agree to an indefinite exemption, because of pressure from some US stakeholders.

There is currently a fierce debate in the US about high drug prices, 1 which may be affecting the US position, said Malpani. But he added that the US's main objection to the rules was 'ideological.'

He said,'It's based on a belief on the importance of having these rules in place. It's a belief that it doesn't have an impact, when of course it does. There's also a belief that having these rules will have some benefit on research and development, but our experience shows that it doesn't.'

The end of the exemption would hamper poor countries' access to generic versions of drugs such as antiretrovirals to treat HIV and sofosbuvir to treat hepatitis C. Sofosbuvir can cost as much as $84,000 (ฃ54000; ) for a 12 week course, but a company in Bangladesh has launched its own version for $900. The United Nations Development Programme said that this price was still out of the reach of many poor countries but that other manufacturers may emerge, which would increase competition and lower the price further.

In September the European Commission did a U turn over its longstanding opposition to a permanent extension of the exemption for low income countries. Announcing the policy change, Cecilia Malmstrom, commissioner for trade, said that intellectual property rules should be a 'non-issue' when the world's poorest people were in need of treatment. The commission believes that extending the exemption indefinitely would give certainty for long term supply as well as enhance local production of drugs.

'This exemption will give the least developed countries the necessary legal certainty to procure or to produce generic medicines,' she said.