TWN Info Service on Health Issues No.13

31 October 2005
 

WTO should review TRIPS/health decision in view of avian flu

In view of a possible avian flu pandemic, Consumers International (CI) has called on the WTO's TRIPS Council to clarify the 30 August 2003 decision regarding the implementation of paragraph 6 of the Doha Declaration on TRIPS and Public Health.

The 30 August 2003 decision by the WTO General Council allows generic copies of medicines made under compulsory licences to be exported to countries that cannot produce, under certain conditions.

All WTO member countries are eligible to import under this decision but 23 developed countries have said they will not use the system for imports.  These 23 countries which have opted out as importers, plus another ten who had to opt out as a condition of joining the EU, will result in hundreds of millions of people who will not be able to obtain generic medicines for stockpiles, as countries will not have the capacity to produce the medicines.

The opt-out provision creates the likelihood that the costs of producing stockpiled medicines will be high and this will reduce the capacity to produce and result in lower levels of stockpiles everywhere.

So far no country has notified the WTO that they intend to use the 30 August 2003 decision as either an importer or an exporter.  With countries both in the North and South at risk of a public health emergency should an avian flu pandemic occur, and the fact that stockpiles of medicine are far under-sourced, 'the lack of WTO notifications is damning evidence that the current system is not working', says CI.

The article below outlines these concerns.  It is reproduced with permission from the South-North Development Monitor (SUNS) of  Wednesday 26 October 2005.

With best wishes
Evelyne Hong

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WTO should review TRIPS/health decision in view of avian flu
by Kanaga Raja (SUNS),  Geneva, 25 October 2005

Geneva, 25 Oct (Kanaga Raja) -- In light of the current situation of a possible avian flu pandemic and other emergencies, Consumers International (CI) has called on members of the WTO TRIPS Council to immediately begin a review of the intellectual property rules and practices that are currently in place to address public health problems.

The international non-profit organization issued this call Tuesday in a statement addressed to the TRIPS Council, which is meeting this week to take up amongst other issues the 30 August 2003 decision regarding the implementation of Paragraph 6 of the Doha Declaration on TRIPS and Public Health.

Consumers International, which represents the rights of consumers globally, also requested the TRIPS Council to immediately issue a clarification on how members who have opted out of the 30 August 2003 decision may opt back in.

The 30 August 2003 decision by the WTO General Council relates to ensuring access to medicines to countries with no or inadequate drug manufacturing capacity.

Paragraph (f) of Article 31 of the TRIPS Agreement provided that compulsory licenses must be granted mainly to supply the domestic market, but the Doha Ministerial Conference in 2001 decided that this should be changed so that countries unable to manufacture the pharmaceuticals could obtain cheaper copies elsewhere if necessary.

The WTO General Council on 30 August 2003 decided to allow generic copies made under compulsory licenses to be exported to countries that lack production capacity, under certain conditions and procedures.

All WTO member countries are eligible to import under this decision, but 23 developed countries are listed as announcing that they will not use the system for imports.

In a separate statement that is not part of the waiver, 11 other members announced voluntarily that they would only use the system as importers in situations of national emergency or other circumstances of extreme urgency.

According to the CI statement, the provision for countries to opt out of importing generic drugs to address public health crises does not serve the interests of consumers anywhere. It creates a strong likelihood that the costs of producing stockpiled medicines will be high, particularly for active pharmaceutical ingredients, which are very sensitive to economies of scale and competition.

It will also reduce the capacity to produce, and will result in lower levels of stockpiles everywhere. This, CI said, puts everyone North and South at risk of potentially preventable death and suffering should an avian flu pandemic occur.

As this week's TRIPS Council meets to review the effectiveness of the implementation of the 30 August 2003 decision, CI urged WTO members to consider the simple question: 'Is the current system working?'

In light of the current situation with respect to avian flu, CI called on the TRIPS Council to immediately issue a clarification on how members who have opted out of the 30 August 2003 decision may opt back in.

Furthermore, the CI statement asked the TRIPS Council to immediately begin a review of the intellectual property rules and practices that are in place to address public health problems, including but not limited to the case of a possible avian flu pandemic.

This review should include:

( a) an assessment of the medical threats to the public health that an avian flu pandemic, SARS (severe acute respiratory syndrome) or other emerging health threats present;

( b) an assessment of the degree to which WTO members have prepared for such cases, including the stockpiling of medicines for an avian flu pandemic or other important threats;

( c) the degree to which the actual management of intellectual property policies and practices are consistent with the 2001 Doha mandate, that WTO members implement laws in a manner that is consistent with the protection of public health and access to medicine for all; and

( d) the degree to which the TRIPS Agreement and its implementation by WTO members should be modified in order to ensure that effective measures are taken to protect the public from such emergencies.

The CI statement also came with an explanatory note providing details on the issue. According to the note, compulsory licensing of patents is consistent with the TRIPS agreement, and WTO members are free to choose the grounds for doing so.

Despite countless news reports to the contrary, compulsory licensing is not limited to cases of emergencies or even to public health.

That said, it is timely and important to highlight public health emergencies as an important special case, and one that illustrates:( 1) the vast gap between official rhetoric and performance in terms of essential protections for public health; and (2) flaws in the 'solution' to the problem of exporting medicines manufactured under a compulsory license.

On the fears of an avian flu pandemic, under the best circumstances, assuming that the new virus causes mild disease, the world could still experience an estimated 2 million to 7.4 million deaths.

Despite an advance warning that has lasted almost two years, the world is ill prepared to defend itself during a pandemic. The WHO has urged countries to stockpile anti-viral drugs for use at the start of a pandemic. Around 30 countries are purchasing large quantities of these drugs, but the manufacturer has no capacity to fill these orders immediately.

On present trends, the CI note said, most developing countries will have no access to vaccines and anti-viral drugs throughout the duration of a pandemic.

The WHO has received a promise for a donation of some 3 million doses of oseltamivir (Tamiflu) from Roche. The US has a target of providing vaccines for 20 million persons and anti-virals for another 20 million, but only a fraction of this is actually available today.

The CI note cited the WHO as saying: "On present trends, most developing countries will have no access to vaccines and anti-viral drugs throughout the duration of a pandemic."

There are two causes for the small stockpiles - capacity and price. Roche and Gilead, the two firms that control the relevant patents on oseltamivir, have been unwilling or unable to expand production of the medicine, and have yet to freely license their patents to generic suppliers.

According to the CI note, the WHO estimates that it would take a decade for Roche to manufacture the desired oseltamivir stockpiles. There has also been very little demand from governments for stockpiles of oseltamivir, because of the high prices that Roche has charged - $6 per dose in some press reports.

Governments all over the world are now making announcements that they will consider  compulsory licenses for the oseltamivir patents. These include members of the US Congress, as well as governments in Argentina, Korea, the Philippines and Thailand.

The CI note said that Roche is now carrying out a public relations and damage control effort to salvage as much control over the patents as possible. There is also need for addressing  increased generic supplies of zanamivir and other medicines, for example.

[According to recent media reports, Roche, under pressure from the US, has agreed to give the license to manufacture Tamiflu to four US generic drug manufacturers.]

The CI note also highlighted a particular problem (about issuing compulsory licenses) concerning the nature of the 30 August 2003 decision regarding the implementation of Paragraph 6 of the Doha Declaration on TRIPS and Public Health.

CI highlighted one of the problems, i.e. the 'opt-out' provision that countries may elect as importers, and the mandatory 'opt-in' provisions for both importers and exporters.

First, the WTO TRIPS Council should reflect that no countries have notified the WTO that they intend to use the 30 August 2003 decision as either an importer or an exporter. Given the current situation, this raises profound questions about the way the global community perceives the 30 August 2003 decision.

With populations at a growing risk of a public health emergency, and the clear evidence that stockpiles of medicine are far under-sourced, "the lack of WTO notifications is damning evidence that the current system is not working."

Second, CI said, is the fact that 23 countries opted out as importers, and another ten were required to opt-out by the EC as a condition of joining the EU. As a consequence, hundreds of millions of people will likely be unable to obtain generic medicines for stockpiles, as they will not have the domestic capacity to manufacture the medicines. These include virtually everyone from the United States to Latvia.

The decision to opt-out of the 30 August 2003 decision, even for a national emergency, is either evidence that the decision is highly unworkable and irrelevant for these countries, or that trade officials want to allow their own populations to go without life-saving medicines in a time of emergency, the CI note said.

The fact that 33 countries are opting out has undermined the legitimacy of the 30 August 2003 decision, and is partly responsible for the reticence of developing countries to openly use this decision, said CI.

In a scenario of an avian flu pandemic, CI said that even if some countries have sufficient or excessive stockpiles of generic medicines, they would not be able to share medicines across borders. Estonia, Poland, UK, Greece, Latvia, France, the Netherlands, New Zealand, Australia, the US and other members of the group of opt-out countries will each be in a state of autarky, an ironic obligation to be imposed on them by an organisation officially devoted to liberalised trade.

The opt-out provision does not serve the interests of consumers anywhere,  added CI. It creates likelihood that the costs of producing stockpiled medicines will be high, particularly for active pharmaceutical ingredients, which are very sensitive to economies of scale and competition. It will also reduce the capacity to produce and will result in lower levels of stockpiles everywhere.

CI also urged the TRIPS Council members to consider the implications of the terms of exclusivity for the protection of pharmaceutical test data on access to medicines. Under Article 39.3 of the TRIPS Agreement, members are required to protect pharmaceutical test data used for marketing approval by regulatory authorities against unfair commercial use.

However, in the implementation of Art 39.3, certain WTO members have chosen to grant exclusive rights to rely upon pharmaceutical test data which is used for the registration of medicines. This practice erects barriers to generic competition because it is expensive, time consuming and sometimes unethical to replicate the tests.

The term of such protection generally ranges between five and ten years in countries that have adopted this system. In the event of a public health crisis, such type of legislation would mean that countries would have to wait five to ten years depending on the period of exclusive rights before there could be generic competition.

CI believed that any country that creates exclusive rights in health registration data undermines the mandate of paragraph 4 of the Doha Declaration, which asserts that the TRIPS Agreement "can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all."

The CI note also said that the 30 August 2003 decision by the WTO General Council was widely criticized by public health groups on the grounds that it was restrictive, complex and protectionist.

It allows wealthy countries to export to poor countries, while restricting imports from poor countries to rich countries. It does not explicitly recognise insufficient economies of scale or comparative advantage as a basis for determining eligibility for importing countries, even though the realisation of efficient scale economies and favourable comparative advantage is one of the main putative advantages of liberalised trade.

Decisions regarding remuneration are made in exporting rather than importing countries, while the procedures for compulsory licensing for export for public health reasons are far more complex and burdensome than are required for compulsory licensing for domestic use, or when compulsory licenses are issued as a remedy to anti-competitive practices under Article 31.k and Article 40 of the TRIPS Agreement.

The African Group proposal seeks to solve some of the problems with the 30 August 2003 decision by the WTO General Council, and should be supported, the CI recommended.