Expeditious, permanent solution sought on public health and TRIPS

WTO Members presented proposals to address the question of drug exports to countries lacking pharmaceutical productive capacity when the TRIPS Council met in the week of 4 March. A group of developing countries called in this regard for an “expeditious and effective” solution that would be in line with the protection of public health.

by Chakravarthi Raghavan

GENEVA: Fifty-one developing countries have called for “expeditious and effective” solutions by the WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) in implementing  the Doha Ministerial Declaration on TRIPS and Public Health, which has directed the Council to find an expeditious solution to the problems of countries lacking domestic production capacity to make use of the compulsory-licensing rights in Article 31 of the TRIPS Agreement.

The Council, which had a one-day discussion in the week of 4 March on this subject as a follow-up to the Doha Declaration on TRIPS and Public Health, is to resume further consideration in June. The Council is working to a deadline set by Doha to report to the General Council before the end of the year.

Besides the proposal from the 51 developing countries, presented by Kenya (chairing the Africa Group), the Council has also received concept papers from the European Communities and the United States.

The US has proposed, among others, a moratorium - which, by definition, is a time-bound temporary palliative at the most - on raising disputes over the compulsory-licensing issue, but at the same time putting conditions on the use of compulsory-licensing provisions under Article 31(f) of the TRIPS Agreement that would reduce or weaken the Doha declaration and mandate.

The EC proposal suggests that there could be either an amendment of Art. 31(f) - which would need ratification by the membership - or an agreed interpretation of Art. 30 of the TRIPS Agreement, to enable countries through a provision in their domestic law to make a limited exception to patent rights to enable production and supply to another country lacking the productive capacity. The EC’s proposal for an agreed interpretation is hedged in with several conditions.

The Doha Declaration on TRIPS and Public Health, in paragraph 4, has affirmed that the TRIPS Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and to promote access to medicines for all, and, in this connection, reaffirmed the right of WTO Members to use to the full the provisions of TRIPS which provide flexibility for this purpose.

In para 6, the declaration has directed the TRIPS Council to find an expeditious solution to the problem faced by countries with insufficient or no manufacturing capacity in the pharmaceutical sector to use their right of compulsory licensing.

Art. 31(f) of the TRIPS Agreement enables a country to issue a compulsory licence but predominantly for supplying the domestic market, thus limiting the production for export.

The EC said that one solution would be to amend Art. 31 to carve out an exception, under certain conditions, to Art. 31(f) for exports of products needed to combat serious public health problems and produced under compulsory licences. Such an approach would need to incorporate important conditions to guard against abuse. While providing a clean basis for a solution, such an approach would mean that no amendment could be effected until a proposal to this effect is put before the 5th WTO Ministerial Conference and the amendment is subsequently ratified.

A second approach would be an agreed interpretation of Art. 30 of TRIPS to allow a Member to introduce a specific exception (to its patent law) for the purpose of supplying another country which has granted a compulsory licence for the import of a specific pharmaceutical product. Such an agreed interpretation could be done by the WTO General Council and would need only a three-fourths majority in the General Council. However, as in the case of an amendment to Art. 31, there should be sufficient safeguards to ensure that the product goes only to the Member issuing the compulsory licence.

The US proposal would restrict the use of compulsory licensing for import by one country for production by a producer in another country. Among the factors the US wants to address in such a contingency are questions about infrastructure, financing, elimination of impediments such as tariffs, etc. Also, a developing country where there is no patent in force would not be able to make use of such a provision, which can be utilized only by those with a patent in force but lack the production capacity.

The US proposal would also hedge in the ability to issue a licence and get a product imported with other limitations, nor would it enable a developed country to make use of it. In effect the solution should be available only to “poor” countries that are truly not capable of manufacturing sufficient supplies of needed pharmaceuticals. The solution should also be available only for the diseases identified and mentioned in the Doha declaration. It should not be available for use except by the government of a country or other non-commercial actors. That is, the drug imported by compulsory licence should not be available for distribution by commercial channels in the country.

The US was opposed to an agreed interpretation to Art. 30 since, in its view, this would seriously prejudice the rights and obligations of Members under TRIPS.

In terms of the Art. 31(f) compulsory-licensing route too, the various conditions stipulated would need to be met, including payment of “adequate remuneration” to the patentee in the producing country.

In this view, the US suggested there could be an agreed moratorium on dispute settlement processes in cases where a Member granted a compulsory licence, under circumstances clearly delineated in the General Council, for export to a poor country. Such an approach would be expeditious and would need no amendment.

Protecting public interest

Kenya, in a statement on behalf of the Africa Group, Brazil, Cuba, the Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Malaysia, Sri Lanka and Thailand, called for an expeditious solution, and said the mandate under para 6 of the Doha declaration must be read in the light of para 4 of that declaration. The co-sponsors would elaborate a paper with possible solutions for the problems, which they would circulate at the next session of the TRIPS Council, Kenya added.

Any solution, in the final analysis, must clearly support governments that adopt measures to address public policy concerns including public health concerns. The objectives and principles of TRIPS would remain largely ineffective if public policy concerns and protection of the interests of the public are not clearly and unequivocally recognized and protected by TRIPS.

The introduction of general exceptions on the fairly standard lines of other agreements in the WTO would help promote the spirit and legitimacy or acceptability of TRIPS, Kenya added.

Also, the expeditious solutions to the problems acknowledged in para 6 of the Doha declaration should not detract the TRIPS Council from the need to support acquisition of all necessary technology and the building of a sound technological base including in respect of medical technology, Kenya said. This was the “proven sustainable way” to address public health and public policy concerns of developing and least developed countries.

The problem (of insufficient or no manufacturing capacities) recognized in para 6 of the Doha declaration “is not limited to a certain category of countries” but rather to any WTO Member having difficulty in securing access to pharmaceutical products as well as in availing itself of flexibilities in the TRIPS Agreement, Kenya added.

Naturally, developing and least developed countries are expected to be the main beneficiaries.

Without prejudice to their right to raise other options in further discussions, Kenya (on behalf of the co-sponsors) stressed that Art. 31(f) had an in-built flexibility to enable Members to grant such compulsory licences for supply, to some extent, of foreign markets. However, it limited Members to authorizing compulsory licences “predominantly” for supply of the domestic market, and this may prevent the possibility of Members using compulsory licences to supply pharmaceutical products to countries in need, given that there may be no domestic demand for such products. In this sense, an amendment to Art. 31 to eliminate sub-para (f) would provide an expeditious solution.

The TRIPS Council could also pursue the route of an authoritative interpretation to Art. 30 to enable production, sale and export of the product to be a limited exception to the patent rights.

As for the question of establishing safeguards, Kenya and the other co-sponsors were “wary of the possibility of imposing burdensome conditions that would render any solution unfeasible.”

The General Council, Kenya said, should as soon as possible adopt a decision reflecting these considerations, and the decision should be integral to and read together with the Doha Ministerial Declaration. Copies of such a decision should also be formally presented by the General Council to the World Health Organization (WHO), Joint UN Programme on HIV/AIDS (UNAIDS), Food and Agriculture Organization (FAO) and World Intellectual Property Organization (WIPO).

In other comments, Canada supported the US idea of a moratorium, making clear that this had to be for a limited duration.

Other developing countries which spoke, however, insisted that there was a need for a permanent and global solution, and not temporary palliatives.

Switzerland, whose position on TRIPS is nearer to that of the US, wanted a clearer definition of the terms used in the Doha declaration, namely, “insufficient or no manufacturing capacity”.

China supported the position of the developing-country   proposals  presented by  Kenya, but  placed  also  emphasis  on technical assistance for capacity-building and technology transfer. (SUNS5076)                                            

From TWE No 276 (1-15 March 2002)