Efficacy Of TRIPS Public Health Amendment In Question At WTO

World Trade Organization members this week will hear a report on an informal meeting on an amendment to intellectual property trade rules intended to allow easier access to medicines, which some argue has had a flawed design from its inception.

The amendment is difficult and costly to use, argue many developing countries and civil society organisations. In addition, provisions in one of Africa’s largest intellectual property offices may prevent outright any of those members’ implementation of the amendment.

The 2 March meeting comes a few weeks before a WTO-wide “stock-taking,” tentatively planned for 29-30 March. WTO Director General Pascal Lamy and trade ministers have been meeting informally over the last several months to figure out where things stand in the beleaguered Doha Round of trade liberalisation negotiations prior to this exercise. The stock-taking was planned during a 30 November – 2 December ministerial meeting (IPW, WTO/TRIPS, 2 December).

During a 22 February report to the WTO General Council, Lamy said that he believed by March it would be clear what technical gaps remain as barriers to the completion of the round, but that it would be too early to know whether political determination is there to carry the work forward. The “stock-taking” is intended to determine most importantly whether the Doha Round can be completed in 2010.

The Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) meets on 2-3 March. Also on the agenda are proposed changes to TRIPS that would bring it in line with the UN Convention on Biological Diversity and the possible extension of high-level protection on geographical indications (product names associated with a place and related characteristics) on wines and spirits to other goods. These two issues have been linked with a third issue – the creation of an international register on geographical indications – and supporters have said the three must be addressed together. A moratorium on non-violation complaints, which deal with a members actions that do not technically violate WTO agreements, but result in loss of expected benefits for another member, may also come up.

A special session devoted to the GI register will follow on 4 March. The creation of the register is mandated in the TRIPS agreement, but there has been much disagreement over participation in the register and the effects of registration (IPW, 5 March 2009).

TRIPS and Public Health: Search for an Expeditious Solution

The success of an amendment to the TRIPS agreement to ease the ability of countries lacking pharmaceutical manufacturing sectors in obtaining affordable medicines via import is likely to be a key topic at the upcoming TRIPS meeting. While not on the draft agenda, current chair of the TRIPS Council Karen Tan said during a 12 February informal meeting on the public health issue that she would brief the formal group, sources told Intellectual Property Watch.

But there is no official record of that informal meeting, nor any outcome document, at the request of the US when TRIPS Council decided to hold the meeting in October (IPW, WTO/TRIPS, 30 October 2009).

At the 12 February informal, several members – including Brazil, China, Cuba, Ecuador, Egypt, India, Indonesia and Venezuela, according to sources – said that the so-called “paragraph 6” amendment is not working effectively. Paragraph 6 refers to the 2001 WTO Doha Declaration on TRIPS and Public Health, which mandated that WTO members solve the problem of medicines access for countries lacking domestic drug production capabilities.

The amendment has been used only one time, when Canadian drug firm Apotex sent two shipments of AIDS medicines to Rwanda under Canada’s Access to Medicines Regime (CAMR). The effort was led by the Canadian company, which has said it does not plan to repeat the complicated process.

But others at the 12 February meeting, such as Argentina, Canada, the European Union, Switzerland and the United States said that its rare use was not necessarily indication of its lack of workability, as there are other procurement tools available for developing countries to access medicines (IPW, WTO/TRIPS, 11 February 2010).

Canada in particular shared its experiences using the paragraph 6 system, according to a participant. Key dates given by Canada, the participant told Intellectual Property Watch, included: May 2005, when domestic regulation to allow for export-oriented compulsory licences (passed by the Canadian Parliament a year before) went into effect; December 2005, when Apotex applied to use the system; June 2006 when Apotex was approved; and July 2007 when Rwanda was identified as Apotex’s customer.

There is then a procedural step required by TRIPS in which the patent holders must be contacted to see if they will provide a voluntary licence. After this failed to produce a licence, Apotex applied for a compulsory licence in September 2007, which was then granted in October 2007. The company then had to undergo a review from Rwanda to obtain public tender. After this was granted in May 2008, the drugs were manufactured for a first delivery date in September 2008, nearly 3 years after Apotex applied to use system.

An August 2006 report on the system [pdf] from Médecins Sans Frontières (MSF, or Doctors without Borders) adds some dates to this timeline. In 2004, the MSF report said, it obtained an agreement from Apotex under an earlier version of the CAMR system to produce a three-in-one antiretroviral combination of zidovudine, lamivudine and nevirapine, the drug that was eventually shipped to Rwanda under CAMR.

But the effort did not work, and MSF ended up purchasing the needed drugs from an Indian generic manufacturer in 2005 (IPW, Public Health, 1 October 2008).

Canadian officials did not respond to requests for comment by press time.

Statements from the TRIPS Informal

The paragraph 6 amendment to the WTO TRIPS agreement allows drugs to be manufactured under compulsory licence primarily for export. In many least developed countries, there may not be a patent on a needed drug anyway. But having freedom from intellectual property rights does not help if there is no national capacity to manufacture the drug, and if an IP monopoly prevents a country with that manufacturing capacity from manufacturing and exporting it at cheap prices.

Prior to the waiver, compulsory licences were intended to serve primarily domestic public health needs; this amendment was intended to aid countries lacking the manufacturing capacity to make a needed drug themselves by easing the possibility for it to be manufactured abroad and imported cheaply.

The amendment, passed as a temporary waiver in 2003 and as a TRIPS amendment in 2005, will be made permanent when two-thirds of WTO members accept it. To date, only 28 primarily developed and middle-income countries have done so (counting the 27 European Union countries as one).

India said during the 12 February meeting it had hoped the paragraph 6 decision would “genuinely and completely address the problems faced by WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector to address their public health problems.”

But this it has clearly not done, the Indian delegate said in a statement delivered during the informal meeting and obtained by Intellectual Property Watch.

Egypt agreed, saying they were “concerned that the system has not been as instrumental in addressing” public health problems as had been hoped and said its limited use “raises questions as to its effectiveness [as well as its] expeditiousness.”

India and Egypt called for a workshop to discuss possibilities for more effective implementation. India suggested the workshop be open to civil society organisations with public health experience, as well as WTO members and Canadian drug manufacturer Apotex, which has had direct experience with the system. India requested this workshop be done in time to report to the October TRIPS Council meeting.

The European Union said “any assessment of the system should be made on the basis of the experience acquired by WTO members and asked for more details in this respect,” according to an EU official. The EU, said the official, views access to essential medicines for developing countries as an issue of outmost importance and is willing to continue consultations.

In response to the suggestion of a workshop with civil society, the United States said the WTO’s annual Public Forum already gives delegates the opportunity to discuss WTO issues with civil society, according to the meeting participant.

Why is Paragraph 6 Used so Infrequently?

After Apotex had shipped its first (of two) shipments to Rwanda, it published a press release explaining that the “process of obtaining a licence to produce a product has to be restarted every time a new country makes a request. There is no assurance that the patent holders will not attempt to once again delay the process.” This process, Apotex President Jack Kay said in the release, “must change… to get quality affordable medicines to those who have no access.”

Kay was speaking of the CAMR, but this regulation was the result of Canada amending its laws to satisfy the paragraph 6 agreement. The drug-by-drug, country-by-country application process was required by TRIPS rules.

The problem with this kind of arrangement is that a generic drug industry cannot be supported by such uncertainty of markets, several developing and civil society sources have attested, for example Ellen ‘t Hoen in her book the Global Politics of Pharmaceutical Monopoly Power [pdf].

There is thus worry from civil society groups and some developing countries that problems in the paragraph 6 system will become more serious as India (a key exporter of cheaper generics to the developing world) has now implemented the TRIPS agreement.

Apotex itself said after the second shipment was made that the “costly and complicated” system needed fixing, and mentions bills before the Canadian Parliament to make it more user-friendly.

Another issue is that developing countries must notify TRIPS Council if they intend to use the system. This can be a deterrent itself, several civil society sources told Intellectual Property Watch, as countries often face severe political pressure when they use compulsory licences.

The minutes of the October 2007 TRIPS Council, at which Rwanda’s intent to use the system were discussed, shows China, the European Commission and Switzerland welcoming its use.

OAPI Laws Preventing Paragraph 6 Implementation?

There is also the concern that the laws of the African Intellectual Property Organisation (OAPI) are such that its 16 members may be unable to use the paragraph 6 system. These states include Benin, Burkina Faso, Cameroon, Central Africa, Chad, Congo, Cóte d’Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea Bissau, Mali, Mauritania, Niger and Senegal.

In particular, a provision under the Bangui Agreement [pdf] – which forms the basis of OAPI’s laws – says that a non-voluntary licence “cannot extend to the act of importation.”