It’s Official: TRIPS Health Amendment In Effect, First Ever To A WTO Agreement

More than a decade after World Trade Organization member states approved the first-ever legal amendment to a WTO agreement, the change to the international intellectual property agreement has entered into effect. Five more members ratified the amendment in recent days, bringing supporters over the minimum needed to put into effect for the amendment aimed at boosting exports of medical products made under compulsory licence.

At issue is an amendment (new Article 31bis) to the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The amendment, a solution to Paragraph 6 of the 2001 Doha Declaration on TRIPS and Public Health, allow countries producing generic medicines under compulsory licence to export all of the medicines to least-developed countries that lack manufacturing capacity themselves.

The Paragraph 6 solution waives a TRIPS provision that requires predominantly all of products made under compulsory licence to be for the domestic market of the producer. The temporary waiver was first agreed in a 30 August 2003 decision, and approved as an amendment to TRIPS in December 2005.

In effect, this is also the first-ever compulsory licence for export of medical products.

The provision was already effectively in place through the temporary waiver and has only been used once, between Rwanda and Canada. That case has been widely criticised as having failed due to complexity and expense.

A key focus going forward may be on least-developed countries working collectively or regionally to participate in this, making it more commercially feasible for exporters, according to sources. The waiver can act as a procurement tool for the national level, they said. National governments only have to submit a simple notification to WTO.

In the past two years, ratifications of the Paragraph 6 waiver accelerated, in part due to efforts by the WTO secretariat, which has among other things explained that some things done in the Rwanda-Canada case could be done better without modifying the amendment. Some 37 percent of ratifications came in the past two years.

The world also moved on to some degree as countries like India, the largest exporter of generics, were able to send a large amount of low-priced generics to LDCs anyway.

LDCs are not required to apply patents on medical products until 2033 under a recently updated agreement at WTO. The original amendment was pushed by the African Group. In recent years, some observers had urged members to modify the agreement to make it more effective before locking it in. Some LDCs such as Uganda or Mozambique meanwhile are building their own capacity to manufacture generics.

It has been argued that the scenario that this waiver responds to may be far more likely to arise now than it was 10-15 years ago.

The five new members notifying WTO of ratification of the amendment in recent days were: Burkina Faso, Nigeria, Liechtenstein, United Arab Emirates and Viet Nam.

The list of all ratifying members is here. It shows 84 members, plus the European Union (which counts as one itself), which had 27 members at time of ratification. The number needed to ratify is considered to be 110 members, according to sources. There has been a debate over how to count the EU (IPW, WTO/TRIPS, 14 April 2016).

The amendment entered into effect once two-thirds of WTO membership ratified it. The number needed kept slowly climbing as new members joined the WTO over the years and now stands at 164 members.

The WTO press release is available here. It includes a link to videos of various key actors speaking on the importance of the amendment’s passage.

It explains: “Flexibilities such as compulsory licensing are written into the TRIPS Agreement — governments can issue compulsory licences to allow companies to make a patented product or use a patented process under licence without the consent of the patent owner, but only under certain conditions aimed at safeguarding the legitimate interests of the patent holder.”

Members who are yet to accept the TRIPS amendment currently have until end December 2017 to do so, WTO said.