Taking away at Geneva what was given at Doha?

Even as WTO members remain deadlocked over how countries lacking manufacturing capacity may be allowed to import generic drugs, the transnational pharmaceutical industry is seeking to close off a major channel for the production of these affordable alternatives to patented medicines.

by Chakravarthi Raghavan

GENEVA: Members of the World Trade Organization are mulling over a “possible elements” paper for a mechanism for implementing paragraph 6 of the Doha Ministerial Declaration on the TRIPS Agreement and Public Health, even as transnational pharmaceutical firms and their powerful home countries are exerting pressures and influence to make it more difficult for countries to bring on stream and market generic products when patents are due to expire.

Marketing generic products into the market is an important instrument to beat the pharmaceutical monopolies and provide access to medicines to meet essential public health needs at affordable prices, particularly in the developing world.

The elements paper has been provided at Geneva by the Chair of the WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS), Ambassador Eduardo Perez Motta of Mexico.

The Council is mandated by para 6 of the Doha Declaration on the TRIPS Agreement and Public Health to consider and come up with an “expeditious solution” to the problems countries with insufficient or no manufacturing capacities in the pharmaceutical sector face in making effective use of their right to use compulsory licensing under the TRIPS Agreement.

Under para 6, the TRIPS Council has to agree on a solution by December. At the rate at which solutions are being promoted and discussed, however, despite some optimism at the UNCTAD Trade and Development Board on the part of the WTO Director-General Supachai Panitchpakdi, it is difficult to see a foolproof and early solution. Millions have died for lack of access to medicines between Doha and now, and many more will fall victim meanwhile.

Two other December deadlines at the WTO have also been set on the implementation issues and the issue of special and differential treatment, both of major concern to developing countries.

While interminable formal and informal talks have been taking place over these issues at the WTO, the major industrial nations, in what many are beginning to suspect are devious ways, are trying to prevent meaningful solutions.

Transnationals’ tactics

At the Doha Ministerial Conference and in the run-up to it, the transnational pharmaceutical lobby waged a series of resistance and lobbying efforts to prevent member countries of the WTO from invoking the admitted flexible provisions in the TRIPS Agreement. The declaration on TRIPS and public health which emerged out of Doha was only agreed because without it that conference would not only have ended in failure but also have brought public opprobrium on the major industrial countries.

Many points of the declaration were drafted in some ambiguous language, and questions like those covered by para 6 were left to the WTO General Council and the TRIPS Council to resolve. However, observers are now beginning to feel that there has been lack of good faith on the part of the majors and solutions are being suggested that give with one hand and take away even more with the other.

The crux of the matter is arriving at a meaningful and effective solution at the TRIPS Council to enable countries with insufficient or no manufacturing capacity to make use of compulsory licensing to ensure availability of medicines for their public at affordable prices.

The solutions that have been thrown about are premised on the basis that some of the few countries with the capacity to produce such medicines under compulsory licensing, and also those who try to bring generic name medicines on the market, will be able to do so.

Just before Doha, however, the Brazilian negotiators realized that their much-commended effort to provide AIDS medicines to the population itself depended on their ability to import the “active substances” which go into a patented medicine and which are manufactured only by a few countries. India is one such.

In an effort to prevent India from undertaking work in the generic pharmaceutical areas and bring future medicines into the market as soon as the patents expire, the transnational pharmaceutical industry appears to be engaged in behind-the-scenes lobbying, applying pressures and suitably ‘oiling’ the process to get the country’s intellectual property laws to provide very onerous conditions on the use of so-called “undisclosed data.” These data are to be provided by the manufacturer seeking marketing rights. (See following article.)

The Industry and Commerce Ministry in India, which is seized of this issue, is under tremendous pressure, including from political and party sources, to yield to the transnational corporations’ (TNCs) demands. The Minister, Murasoli Maran, is seriously ill in hospital, and the TNCs and their lobbyists hope to cash in on this situation, activists in India fear.

If the TNCs, through political lobbying and contributions to political campaigns, can get a very strict law or amendment enacted, one of the major avenues for several of the developing countries to import “active substances” and formulate and supply cheap medicines at home will be blocked.

Solutions and roadblocks

On the TRIPS-and-public-health issue, the elements paper put forward by the Mexican chair of the TRIPS Council seemingly seeks to find solutions to the problems of countries with insufficient or no manufacturing capacities.

The one major route to deal with the problem, namely, enabling countries with no capacity to import from those with the capacity to supply, is caught up in a chicken-and-egg situation. A country with the capacity can compulsorily license production but, on one reading, may not be able to export it. A country with no capacity, on the other hand, has the right, but no means, to exercise the compulsory-licensing route.

The proposed solutions include authoritative interpretations or changes in Article 31 of the TRIPS Agreement (on compulsory licensing), and/or using the Article 30 route (limited patent exceptions) so that a country with the ability to produce and export could do so without much internal hassle.

In an effort to head off countries from using these routes, however, there has been talk of industrial countries agreeing to a moratorium on raising disputes on this issue at the WTO or giving waivers to the countries concerned. Both approaches - which imply an obligation under the TRIPS Agreement not to compulsorily license or engage in parallel imports, etc - fly in the face of the Doha declaration, which states that countries have the flexibility under the TRIPS Agreement to adopt policies to ensure availability of essential medicines to their public.

But the major corporations and their patron governments give the impression of being engaged in a confidence game of sorts, trying to fool the African and other poor countries which face emergency health crises over AIDS or pandemics like malaria, that the moratorium or waiver routes are the easy way out of the problem.

The latest Chairman’s text does not resolve this problem. It has however spelt out some elements on other key issues that have also got to be agreed upon. The elements suggested are:

Under products and disease coverage, products of the pharmaceutical sector, including active substances used in the manufacture of pharmaceuticals needed to address public health problems - para one of the Doha declaration mentions “especially” HIV/AIDS, TB, malaria and other epidemics. The use of “especially” would mean other diseases too may fall in these categories.

Whether these matters need to be more clearly defined, for example, in relation to diagnostics, has been left open for discussion.

Another element is a so-called two-stage approach to defining the “eligible countries” - apart from the least developed. How would other developing or transition economies be included or benefit? More work is needed, says the Chairman’s text.

Who could supply? All developing and least developed countries are to be included - but whether developed countries could also use this route is to be discussed further. If the TNC lobby succeeds in severely restricting the Indian generic industry, then either the developed countries have to become the real beneficiaries as suppliers or there will be no suppliers.

There are also questions relating to safeguards to prevent leakage back to the rich countries of the compulsorily licensed product put on the market in a country. There have been some press reports which make the point that AIDS drugs supplied to African countries have been smuggled back. To put this in perspective, however, the kind of smuggling involved here seems minuscule compared to what tobacco firms do with impunity in Europe to smuggle in cigarettes to avoid taxes.

The elements paper also covers other issues about notifications and transparency.

On the legal mechanisms to give effect to these, the elements paper makes reference to the Doha declaration call for Article 31-based solutions: amendment to Article 31(f) combined with interim waiver or moratorium until the entry into force of the amendment; an agreed interpretation of Article 30 (by which a supplying country could make a limited exception to allow exports to a needing importing country); and a waiver of the obligation in Article 31(f) of a long duration. (Under Article 31(f), compulsory licensing shall be authorized “predominantly for the supply of the domestic market”.)

Tied to these are questions about the “domestic market” in Article 31(f): is this a national market, a market under a regional trade agreement or something else?

In the informal discussions over these elements at the TRIPS Council in the week of 14 October, on interpretation of Article 30 of the TRIPS Agreement, developing countries (Kenya representing the African Group, South Africa, Brazil, India, Zimbabwe, Lesotho, Egypt, Cuba, Venezuela) opposed any obligations that went beyond the TRIPS Agreement, the so-called “TRIPS-plus” obligations sought by the US and a few others.

The US and European pharmaceutical lobbies, backed by some of their home governments, have been trying to restrict the scope of the Doha declaration mainly to the least developed countries, a move that developing countries have rejected.

There were objections to defining eligible countries since this would in advance rule some countries to be ineligible. There were also objections to creating new categories of countries.

South Africa, India, Cuba and others supporting the Article 30 interpretation route as the quickest and easiest solution to ensure availability, will be putting forth a paper soon.

In defining eligibility criteria, Singapore and Hong Kong said they would oppose  categorization based on per capita incomes. Hungary and Bulgaria insisted transition economies must be included.

Norway shared the views of many developing countries that compulsory licensing already comes with many conditions, and there is no need for “TRIPS-plus” obligations. Countries importing under compulsory licence should not have more obligations or fulfil more conditions to be eligible. The only safeguard that Norway could contemplate is safeguards against diversions. Norway preferred an amendment to Article 31(f), with a waiver until the amendment is effective.

Switzerland argued that implementing para 6 of the Doha declaration involved altering the balance in the TRIPS Agreement, and so more conditions were needed!

The US, Canada and Australia favoured the waiver route, while the EC wanted Article 31(f) amendment with waiver. (SUNS5217)                                  

From Third World Economics No. 293 (16-30 November 2002)