EU Urged To Back Poor Countries’ Use Of TRIPS Flexibilities

By David Cronin for Intellectual Property Watch
BRUSSELS – The European Union should stop demanding that poor countries apply its intellectual property rules to medicines through trade negotiations with the African, Caribbean and Pacific (ACP) bloc, legal experts argued at a 4 June event here.

The EU’s executive arm, the European Commission, is hoping to conclude free trade deals known as Economic Partnership Agreements with 76 ACP countries by the end of this year. Under proposals put forward by the Commission, these would require ACP countries to place EU intellectual property rules on their national statute books.

Frederick Abbott, a professor of international law at Florida State University (US), said that if the Commission is successful, it would impose a “substantial burden” on the countries concerned and that there could be adverse consequences for public health. Instead, he recommended that the EU encourage poor countries to make use of flexibilities in rules on intellectual property rights at the World Trade Organization (WTO). Doing so could drive down the cost of drugs that would prove prohibitive should the patents on them be enforced.

Abbott has been hired by the European Parliament’s committee on international trade to prepare an analysis of what policy options the EU has to boost the supply of medicines in poor countries.

Presenting his initial findings on 4 June, Abbott considered whether the Parliament should endorse a December 2005 protocol amending the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (IPW, WTO/TRIPS, 6 December 2005).

The protocol is designed to give permanent effect to a 2003 waiver from TRIPS agreed by to by WTO members. The waiver allows countries lacking drug manufacturing capacity the increased possibility to import generic versions of patented medicines produced under compulsory license. It followed the declaration of the 2001 WTO ministerial conference in Doha, Qatar, that intellectual property rights should be interpreted in a way that protects public health and promotes “access to medicines for all.”

Abbott said that if members of Parliament decide to push for a renegotiation of the amendment, there is a risk that the pharmaceutical industry will succeed in restricting the protocol’s scope so that it could only be used to cover certain diseases.

Yet while the WTO has asked its 150 member governments to ratify the protocol by the end of 2007, Abbott argued that the Parliament may be right to stall on approving it. Delay could be used as a tactic to pressure the Commission and the 27 EU governments to refrain from insisting that ACP countries agree to apply EU standards on intellectual property.

Jerome Reichman, professor of law at Duke University (US), said that poor countries in general have seen “an enormous flood of patent applications” in recent years. Colombia’s patent office, for example, has some 3,500 applications pending.

Reichman, who is co-author of the report with Abbott, said that the European Commission’s proposals to the ACP countries would require them to enforce intellectual property in a way that presumed in favour of patent holders and compensate them for losses incurred when patents are infringed upon.

European Union Silence

A Commission official said, however, that the ACP should use European rules on intellectual property as a “source of inspiration,” in particular to prevent fraud. “We have to face the reality that poor people are often confronted with fake medicines,” the official added. “This is certainly the case in Africa.”

The humanitarian organisation Médecins Sans Frontières (MSF) has called on the EU to support countries that have decided to issue compulsory licenses to overrule drug patents.

Paul Cawthorne, MSF’s head of mission in Thailand, said “it is of considerable concern that the European Union has been silent” in the international dispute that followed the Thai government’s decision to issue a compulsory license for the AIDS treatment efavirenz in November 2006. At $468 per patient per year, the price charged by Merck, the drug’s patent-holder, was more than twice that of a generic version of the same medicine, made in India. Yet while the Thai decision was taken on public health grounds, it was opposed by drug firms and by the US government.

“In Thailand, I saw men, women and children dying because they could not have access to medicines at prices MSF or the Thai government could afford,” said Cawthorne, adding that the issuing of compulsory licenses had led to an “impressive scaling up of treatment”.

But Jon Pender, director of government affairs with GlaxoSmithKline, claimed it is “misleading and counter-productive to focus on intellectual property protection as a significant barrier to access to medicines in developing countries,” arguing that rampant poverty and inadequate healthcare systems are bigger problems. More than 95 percent of all drugs on the ‘essential medicines list’ compiled by the World Health Organization (WHO) are not covered by patents, he noted. “And yet the WHO says that one-third of the world’s population do not have regular access to these drugs – in parts of Africa and Asia, this rises to two-thirds.”

Italian Liberal MEP Gianluca Susta complained that “not a single member of the WTO” has yet decided to use the system agreed in 2003 “to import cheap life-saving medicines.” This, he said, “could mean that the decision does not address in a satisfactory way the problems faced by developing countries in accessing medicines at affordable prices.”

Greg Perry, director-general of the European Generic Medicines Association, complained that the 2003 decision is “only likely to have a marginal impact.” Companies making generic versions of drugs would not find it financially rewarding to supply drugs to small countries, even if they issue compulsory licenses, he said, while recognising that it may be possible to overcome that difficulty if several governments could issues licenses jointly.

David Cronin may be reached at info@ip-watch.ch.