New Intergovernmental Initiative Highlights IP Flexibilities For Drug Prices

By Tove Iren S. Gerhardsen
A new international intergovernmental health initiative tied to airplane taxes highlights the use of flexibilities in intellectual property laws as an option for reducing drug prices. The plan is being welcomed by non-governmental organisations that have been lobbying for this point.

The initiative is an international drug purchase facility and goes under the “brand name” UNITAID, Khalil Elouardighi of Act Up in Paris told Intellectual Property Watch. It is supported by five governments: Brazil, Chile, France, Norway and the United Kingdom.

The project was launched on 19 September in New York by the five governments as well as United Nations Secretary General Kofi Annan and former US President Bill Clinton. UNITAID will be operational by 1 October, and the first board meeting is scheduled for 3 to 4 October, a Brazilian diplomat based in Brasilia said.

The group has come up with an “airline solidarity contribution,” which is a levy from airplane tickets that will go towards purchasing medicines and diagnostics to fight HIV/AIDS, tuberculosis and malaria in developing countries and reduce the costs of the treatment of these diseases, Elouardighi said.

UNITAID does not want to create a new secretariat and will exist “quite independently” under the secretariat of the World Health Organization, which will just host it, Elouardighi said. He added that Chile and France have already introduced the airline tax.

UNITAID has prepared a “prospectus” [UNITAID Prospectus] and it is this text that includes language taking a stand on intellectual property rights and drugs. The document is dated 1 September and is entitled, “UNITAID – Together to Heal.” The prospectus was agreed to a week ago, a Brazilian source in Geneva said. The source said it is supposed to “explain to the public how UNITAID works and what is the purpose.”

The prospectus states, as point three under “objectives” related to drugs and diagnostics that: “UNITAID will base its price reduction strategy on market competition. Where intellectual property barriers hamper competition and price reductions, it will support use by countries of compulsory licensing under the framework of the [World Trade Organization] Doha Declaration on the Trade-Related Aspects on Intellectual Property Rights (TRIPS) and Public Health, when applicable.”

This point is related to the objectives of reducing prices on medicines and diagnostics and increasing the availability and supply of medicines and diagnostics.

Loosely speaking, compulsory license means that a government authorizes the manufacture of a product without getting the go-ahead from the patent owner. The TRIPS agreement allows this in certain cases. Flexibilities were introduced under the Doha Declaration, which was launched at a WTO ministerial meeting in Doha, Qatar in 2001, and were made permanent under the TRIPS agreement in December 2005 (IPW, WTO/TRIPS, 6 December 2005).

Act Up and other NGOs have tried to lobby regarding the IP language of the UNITAID prospectus since February and have met with the five governments. They now say they accept this language.

“Act Up-Paris and all the other access-to-medicines campaigners have had to lobby the five governments insistently in order to obtain this commitment to lowest prices, competition and compulsory licensing. This commitment to back up the Doha Declaration with purchasing power should signal to global holders of HIV, tuberculosis and malaria drug patents that the time has come to open their products to competition in developing countries, for example by voluntarily creating a patent pool,” said Elouardighi.

UNITAID “is a step in the right direction but there remains more than half the way to go,” Elouardighi said.

The Brazilian diplomat in Brasilia said that all the five countries had agreed to include the language on intellectual property and “embraced it wholeheartedly,” adding that civil society had played a very important role and had been watching this proposal closely.

The paragraph on intellectual property is an important principle where the prospect talked about price reductions, he said, although details would have to be worked out later.

Countries have vowed to support UNITAID with a total of $300 million annually, the Brazilian diplomat said. The money has not been paid yet, but the WHO is expected to “open the account” after the board meeting, he said.

The WHO said in a press release that it “shares the key public health objectives of UNITAID as it seeks to assist developing countries in purchasing the medicines needed to scale up HIV, tuberculosis and malaria control programmes,” and it is “pleased to be the hosting institution.” UNITAID will also work with UNICEF, the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Clinton HIV/AIDS Initiative.

Tove Gerhardsen may be reached at tgerhardsen@ip-watch.ch.