By Catherine Saez
A much-heralded 2003 waiver to World Trade Organization intellectual property rules aimed at helping poor countries receive needed medicines they cannot produce themselves has brought little if any help five years later, according to governments and public health advocates.

The so-called “30 August 2003 Decision” allowing WTO members to use compulsory licences to produce and export more pharmaceutical products (without the patent-holders’ consent) to developing countries lacking production capacity has been used only once. And although that instance was seen as positive, the arduous implementation process for the waiver makes it generally inapplicable, according to speakers at a session organised by Médecins Sans Frontières (MSF) at the WTO Public Forum on 25 September.

On the same day as the session, the first shipment of an antiretroviral combination drug for HIV/AIDS was due in Rwanda after a four-year process. Some 21,000 Rwandans living with AIDS will be able to receive treatment for a year as a result. Canadian pharmaceutical manufacturer Apotex produced the medicine.

IP rules at the WTO are governed by the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The 30 August Decision was part of the implementation of paragraph 6 of the 2001 Doha Declaration on the TRIPS Agreement and Public Health, which mandated WTO members to find a solution to the inability of some countries to use compulsory licences to produce needed medicines because they lack production capabilities and others were not permitted to export to them. In 2005, WTO members adopted the waiver as a permanent amendment to TRIPS, which still needs to be ratified by enough members to enter into effect. At the time, there was a lobbying effort to change the language, but it was defeated.

Five years after the 30 August 2003 Decision, only one drug has been manufactured and delivered to a developing country under this decision. The company, Apotex, had to agree to manufacture the drug on a lowest-price basis that would allow MSF to find a country willing to import it, after which it was subjected to testing and the Health Canada’s approval process. The nongovernmental organisation MSF was originally invited by the generics industry in Canada in 2004 to propose an effective drug that they could produce with Health Canada, and then was heavily involved in the process.

With patients needing the drug, MSF finally decided to buy it from an Indian generics producer, which manufactured it for a low price, in 2005.

“We had been working on this for three years trying to get one drug out,” said Rachel Kiddell-Monroe from Universities Allied for Essential Medicines and former MSF Essential Medicine Campaign Canada coordinator. “We had no developing country that had shown any interest. All of our field teams in all of our projects that were relevant had been asking and trying to get through and every government consistently said no.”

Canada finally issued a compulsory licence in September 2007 (the first in the world under WTO August 2003 Decision), a willing developing country was found, and Apotex was able to offer a lower price than its Indian competitors, which reduced the market price, but the whole process is “unworkable,” said Kiddell-Monroe. One of the main barriers is the notification in writing to the TRIPS Council, she said, as importing countries, such as Rwanda also had to issue a compulsory licence, which smaller economies can find politically difficult.

Inthira Yamabhai from the Thai Ministry of Public Health explained that issuing compulsory licences had been a difficult and painful experience for Thailand. Patent holders threatened generics producers on the illegal use of compulsory licences, although the Thai patent law (and TRIPS) allows them. Thailand also was put on the United States Trade Representative’s priority watch list and had to sustain potential trade retaliation, threats of foreign investment withdrawals and propaganda to undermine the country’s image, Yamabhai said.

A participant from MSF India said that the compulsory licences in Thailand had had repercussions in her own country. “What has been done to Thailand had an impact on Indian legislation,” she said. She also said that in the 30 August Decision too many conditions apply. “We can’t spend another five years to make another compulsory licence work,” she said.

India amended its patent law in 2005 to comply with TRIPS. The new law includes safeguards [pdf - source: Indian government] to effectively balance IP protection and public health said Sunjay Sudhir from the Indian mission to the WTO in Geneva. India has not used compulsory licences since the law was adopted because there is little need, as 97 percent of drugs in the Indian market are off-patent, he said, adding later that this could change in the future. There also is a notable provision in the Indian law (Section 3d) against “evergreening,” which is way of extending a patent by making small changes in the existing patented product. [Editor's note: this paragraph was modified on 2 October.]

For Greg Perry, director general of the European Generic Medicines Association, “the [30 August] provision does not work, it is a failure and it was never going to work.” According to him, the process is hindered by many factors. “It is too complicated, it is cumbersome, there is no provision for market capacity or economy of scales, no long-term guaranties, no link to incentive systems and no political support,” he said.

Gianluca Susta, an Italian member of the European Parliament, said that Parliament members were concerned that the European Union was focussing on the 2005 TRIPS amendment, “insisting on its ratification at all costs, while at the same time there was no pro-active support from the EU to countries who use, or would like to use, the flexibilities contained in the TRIPS agreement as highlighted in the Doha Declaration on TRIPS and Public Health.”

The Parliament agreed to ratify the permanent amendment to TRIPS after the EU Council publicly committed to the requests of the Parliament, in particular to support the developing countries which use the flexibilities built into the TRIPS to facilitate access to essential medicines. “The question of access to medicine and TRIPS should be considered as a whole and not limited to a single mechanism,” he said.

Other TRIPS Flexibilities as Solution

The 30 August Decision is not the only mechanism to improve access to medicine, said Roger Kampf from the WTO IP Division. According to him, there is too much emphasis on the paragraph 6 system as this is not the only TRIPS flexibility.

“We need to focus on TRIPS flexibilities” also said Perry. “We are concerned that those flexibilities are not promoted by national institutions although some progress has been made,” he said.

Patent pooling seems to be the solution presented by Dr Jorge Bermudez, the executive secretary of UNITAID, an international drug purchase facility. A licensing agency should be established to discuss a patent pool that covers low and middle income countries and focus on paediatric Human Immunodeficiency virus, under the UNITAID mandate, he said.

The Canadian experience has discouraged MSF from getting involved in the application of the 30 August Decision. Five years after the decision, 70 percent of patients needing antiretroviral therapy still do not have access to treatment, and no other country or company has tried to use the legislation either in Canada or in the other countries which have adopted legislation, said Kiddell-Monroe.

While Kampf suggested that MSF avoid drawing conclusions from a single experience, Ellen ‘t Hoen from MSF said, “It is not enough to sit here in rooms in Geneva and say nice things to each other, but at the end of the day it needs to work on the ground.” Ordering medicine through the 30 August Decision system is “becoming extremely complicated as we have to persuade heads of states to notify the WTO. In principle it’s easy,” she said, “but in practice drug procurement and the ordering of medicine is incredibly difficult.”

WTO members must reconsider ratifying the 30 August Decision, recognising the conclusions of the Canadian experience, said Kiddell-Monroe, and should instead consider TRIPS Article 30 on exception to exclusive patent rights as an alternative. Article 30 states: Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests on third parties.

She said: “WTO members have to reconsider this whole crazy notion of ratifying a decision that doesn’t work into the TRIPS agreement, where is the sense in that?”

Catherine Saez may be reached csaez@ip-watch.ch.