TWN Info Service on WTO and Trade Issues (Jan17/05)
25 January 2017
Third World Network
TRIPS amendment on access to cheaper drugs comes into force
Published in SUNS #8387 dated 25 January 2017
Geneva, 24 Jan (Kanaga Raja) - A protocol amending the WTO TRIPS Agreement that
would enable developing countries with insufficient or no manufacturing
capacities in the pharmaceutical sector to import cheaper generic medicines
produced under compulsory licencing finally came into force on Monday, 23
In a press release, the WTO Secretariat reported that Burkina Faso, Nigeria,
Liechtenstein, the United Arab Emirates and Viet Nam have notified in recent
days that they have ratified the protocol amending the TRIPS Agreement, thus
reaching the two-thirds threshold needed to formally amend the TRIPS Agreement.
Under paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public
Health of 2001, Ministers recognised that "WTO Members with insufficient
or no manufacturing capacities in the pharmaceutical sector could face
difficulties in making effective use of compulsory licensing under the TRIPS
They instructed the TRIPS Council to "find an expeditious solution to this
problem and to report to the General Council before the end of 2002."
Under Article 31 of the TRIPS Agreement on other use without authorisation of
the right holder, paragraph (f) states that any such use "shall be
authorised predominantly for the supply of the domestic market of the Member
authorising such use."
On 30 August 2003, WTO Members agreed to waive this limitation under Article
31(f), and further agreed that the waiver will last until the article is
Paragraph 2 of the 30 August 2003 General Council decision states: "The
obligations of an exporting Member under Article 31(f) of the TRIPS Agreement
shall be waived with respect to the grant by it of a compulsory licence to the
extent necessary for the purposes of production of a pharmaceutical product(s)
and its export to an eligible importing Member(s)" in accordance with the
terms set out in the paragraph.
On 6 December 2005, WTO Members agreed to make permanent the August 2003 waiver
by incorporating it into the TRIPS Agreement when two-thirds of the Members
have ratified the protocol of amendment.
The December 2005 General Council decision contains the protocol amending the
TRIPS Agreement, which includes an annex to the protocol amending the TRIPS
Agreement, a new annex to the TRIPS Agreement and an appendix to the annex to
the TRIPS Agreement (on assessment of manufacturing capacities in the
The annex to the protocol amending the TRIPS Agreement contains a new Article
31bis which contains five paragraphs:
1. The obligations of an exporting Member under Article 31(f) shall not apply
with respect to the grant by it of a compulsory licence to the extent necessary
for the purposes of production of a pharmaceutical product(s) and its export to
an eligible importing Member(s) in accordance with the terms set out in
paragraph 2 of the Annex to this Agreement.
2. Where a compulsory licence is granted by an exporting Member under the
system set out in this Article and the Annex to this Agreement, adequate
remuneration pursuant to Article 31(h) shall be paid in that Member taking into
account the economic value to the importing Member of the use that has been
authorized in the exporting Member. Where a compulsory licence is granted for
the same products in the eligible importing Member, the obligation of that
Member under Article 31(h) shall not apply in respect of those products for
which remuneration in accordance with the first sentence of this paragraph is
paid in the exporting Member.
3. With a view to harnessing economies of scale for the purposes of enhancing
purchasing power for, and facilitating the local production of, pharmaceutical
products: where a developing or least developed country WTO Member is a party
to a regional trade agreement within the meaning of Article XXIV of the GATT
1994 and the Decision of 28 November 1979 on Differential and More Favourable
Treatment Reciprocity and Fuller Participation of Developing Countries
(L/4903), at least half of the current membership of which is made up of
countries presently on the United Nations list of least developed countries,
the obligation of that Member under Article 31(f) shall not apply to the extent
necessary to enable a pharmaceutical product produced or imported under a
compulsory licence in that Member to be exported to the markets of those other
developing or least developed country parties to the regional trade agreement
that share the health problem in question. It is understood that this will not
prejudice the territorial nature of the patent rights in question.
4. Members shall not challenge any measures taken in conformity with the
provisions of this Article and the Annex to this Agreement under subparagraphs
1(b) and 1(c) of Article XXIII of GATT 1994.
5. This Article and the Annex to this Agreement are without prejudice to the
rights, obligations and flexibilities that Members have under the provisions of
this Agreement other than paragraphs (f) and (h) of Article 31, including those
reaffirmed by the Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2),
and to their interpretation. They are also without prejudice to the extent to
which pharmaceutical products produced under a compulsory licence can be
exported under the provisions of Article 31(f).
STATEMENTS BY WTO DG AND OTHERS ON TRIPS AMENDMENT
"This is an extremely important amendment. It gives legal certainty that
generic medicines can be exported at reasonable prices to satisfy the needs of
countries with no pharmaceutical production capacity, or those with limited
capacity," said WTO Director-General Roberto Azevedo, in a WTO news
"By doing so, it helps the most vulnerable access the drugs that meet
their needs, helping to deal with diseases such as HIV/AIDS, tuberculosis or
malaria, as well as other epidemics. I am delighted that WTO members have now
followed through on their commitment and brought this important measure into
"As important as trade policy is, health and well-being must take
precedence," said Amina Mohamed, Foreign Minister of Kenya, who was chair
of the WTO General Council during the period when the amendment was adopted in
December 2005, in a video statement posted on the WTO website.
"WTO Members recognise this and have proven how seriously they take health
issues by ratifying and putting into force an amendment to WTO rules which will
facilitate access to essential medicines in low-income countries," she
Efforts to amend the TRIPS Agreement were driven by public health
considerations and by a desire to find the best way to use the rules of the
global trading system to assist those in developing countries who are seriously
"This is the first-ever amendment to WTO agreements and now that
two-thirds of members of the WTO have ratified it, it will come into force. It
has been a long time coming," she said.
She added that the concerns held by developing countries were based on their
need to ensure adequate flexibility to obtain affordable medicines.
She noted that in 2001 WTO members struck a deal which clarified the accords
and provided governments in the developing world greater clarity and certainty.
But one more element was needed - how to guarantee that countries lacking the
capacity to produce generic drugs could still procure them affordably.
In 2003, WTO Members agreed that if the importing country could not negotiate
the acquisition of patented medicines at affordable prices, these medicines
could be produced under licence by drug makers in third countries.
"This was a major step and I am proud to say that African countries played
a major role in bringing about this agreement," she said.
"It has taken some time to implement this agreement but now that it is in
place, developing country governments have an important tool for obtaining
Also in a video statement, Ambassador Modest Mero of Tanzania, Chair of the
TRIPS Council, underlined the importance of the entry into force which is not
only the first-ever amendment of the multilateral agreements administered by
the WTO but also a concrete response by trade ministers to address the concerns
in the area of public health.
"Given the importance of the TRIPS amendment of the protocol, I call upon
countries to turn the page now and to look into ways and means in making this
new procurement tool working effectively in practice," he added.
Dr Margaret Chan, Director-General of the World Health Organisation (WHO),
welcomed the entry into force of the TRIPS amendment on public health as an
additional legal pathway for access to medicines, specifically in countries
that have no domestic pharmaceutical manufacturing capacity.
"This entry into force marks the first amendment to any of the WTO
multilateral trade agreements since their adoption in 1994. As such, it
reinforces the importance of health in the formulation of international trade
policies," she said.
"We are a long way from reaching global equity in access to essential
medicines especially at a time when the costs of some new treatments are
unsustainable even in the richest countries in the world."
According to Dr Chan, the factors that stand in the way of universal access to
affordable patent and off-patent medicines are multiple and inter-related in
"Taking full advantage of TRIPS flexibilities is important but not enough
to address these complexities. In this era of sustainable development, WHO and
its partners are working to improve manufacturing capacity for pharmaceuticals
in the developing world especially in sub-Saharan Africa."
"We are also deeply engaged in finding a model for the fair pricing of
pharmaceuticals," she added.