WTO Members Celebrate Treaty Amendment On Medicines Access, Look Ahead

A high-level meeting at the World Trade Organization today welcomed in an amendment to international trade rules for intellectual property aimed at boosting exports of affordable medicines. It also set out the way ahead to make it work.

“This is a historic session of the TRIPS Council,” WTO Director General Roberto Azevêdo, joined by about a dozen ambassadors, said in remarks to a special session of the WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS).

“This is the very first amendment to WTO multilateral law, the first to be agreed among all Members, and the first to come into force,” he said in prepared remarks.

“It is significant that this first amendment is not about pursuing trade opportunities or market access for their own sake,” Azevêdo said. “Rather, its aim is to enhance access to medicines by the most vulnerable countries and overturn a situation in which the poorest could face the biggest hurdles in accessing essential drugs.”

At issue is a protocol amending the 1994 TRIPS Agreement (new Article 31bis), which went into effect on 23 January after two-thirds of WTO members ratified it (IPW, WTO/TRIPS, 23 January 2016).

The amendment, a solution to Paragraph 6 of the 2001 Doha Declaration on TRIPS and Public Health, allows countries producing generic medicines under compulsory licence to export all of the medicines to least-developed countries that lack their own manufacturing capacity.

The Paragraph 6 solution waives a TRIPS provision that required that 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. Only now did the required two-thirds of WTO membership ratify it.

In addition to the WTO director general, many ambassadors attended the closed event, according to sources, including from Argentina, Australia, Bangladesh, Benin, Botswana, Brazil, Canada, European Union, Kenya, Korea, and Switzerland. The TRIPS Council is chaired by the African Head of Delegation, Ambassador Modest Mero of Tanzania, who also spoke at today’s gathering.

While it took longer than expected to bring the 2005 amendment into force, Azevêdo said, momentum really picked in the past two years. “This impressive show of support is testament to members’ renewed interest in the system, their desire to see it work for the benefit of all, and their willingness to deliver on commitments made to each other,” he said.

The Work Ahead

“The real work lies ahead,” a participant said afterward. This includes awareness-raising, and helping procurement offices to know how to use it.

The waiver is available to countries that have ratified it and implemented it into their national laws. WTO can help countries to do that. A relevant reference paper that emerged recently from WTO provided an analysis of the waiver (IPW, WTO/TRIPS, 12 October 2015).

An annual review is held at the autumn meeting of the WTO Council for TRIPS.

The new amendment could be seen as an “additional flexibility” that does not interfere with the other flexibilities available to countries under the TRIPS Agreement, as one source put it, echoing Azevêdo.

Azevêdo said: “Entry into force consolidates compulsory licences for exports of generic medicines as an integral part of the TRIPS Agreement. It is now on a par with all other flexibilities for health under the Agreement.”

Perhaps the best way to view the new amendment is as a “tool for procurement,” as the director general called it.

“We have heard concerns expressed, even in this Council, that Members may be reluctant to use this mechanism for fear of repercussions,” said Azevêdo. “The system is now unambiguously part of international law. It is a negotiated solution that has been expressly welcomed and supported by governments around the world.”

“Policy debate may continue about the optimal use of compulsory licensing for access to medicines but there is no ambiguity about the status of this system,” he said. “It is a legitimate measure with wide support and encouragement for its use when the situation on the ground so requires.”

But what can be different is for countries within a region to work together to make the amendment effective, he said.

“[I]f this is to be a practical tool for access to medicines, we should look beyond the legal text,” said Azevêdo. “Like other public health flexibilities, its impact will depend on how it is used in practice. The new Article 31bis is another tool which can be used for procurement, and it is one that has to be taken up positively if its potential is to be realized.”

“There is considerable scope for pooling demand and coordinating use of the system, to build economies of scale and to service regional needs in an efficient way,” he said. “And we need to understand first, for what medicines, second, for what patient cohorts, and third, for what practical supply scenarios it is most useful. This is particularly true given that we now have a widening range of alternative avenues for procurement of affordable medicines.”

Closing the Loop

A question was raised in recent months over whether it was best for developing countries not to cement the Paragraph 6 system as a permanent amendment to TRIPS before revising it. But no member state in the meeting today suggested holding it up, according to sources.

“From the political point of view, we wanted to close the loop,” a delegate from South African delegate told Intellectual Property Watch outside the meeting room afterward. African countries were among the strongest demandeurs of the amendment back when it passed in December 2005. “This is not a perfect solution, not a panacea,” he said, but it creates legal certainty.

The political side was captured by Azevêdo. “We should recall that the initiative to turn this into a formal provision of the TRIPS Agreement was taken by the African Group of WTO Members,” he said. “Many have referred to it, quite rightly, as the ‘African Amendment’.”

Meanwhile, there is an ongoing debate inside South Africa about access to medicines, as it is finalising its Intellectual Property Policy Framework. The government is looking at more than one way to address these issues, and is working to bring its laws into alignment with the TRIPS flexibilities, the South African delegate said.

What South Africa wants to do is look at the regional level for use of Paragraph 6, which will enhance transparency, he said.

The TRIPS amendment is “the first step in the process, where we take some of the power, initiative,” and make policy more suited to their needs, the delegate said.

“This is not the end of it. This is the start,” he said. It will be brought up in TRIPS Council, side events and other ways. They will push for the High-Level Panel recommendations to be considered in a scientific way.

In its statement, India welcomed the amendment’s entry into force. The delegate highlighted the 2013 trilateral study by WTO, World Health Organization and World Intellectual Property Organization entitled, “Promoting Access to Medical Technologies and Innovation: Intersections between public health, intellectual property and trade.” WHO and WIPO did not appear to have a representative at the event, a participant said.

India also highlighted the recent report of the UN Secretary-General’s High-Level Panel on access to medicines, which called for a revision of the Paragraph 6 solution as it is overly complex to use.

“We urge the Membership to constructively engage on the question of improving the paragraph 6 system for making it more workable and effective, so that it can benefit Members with insufficient or no manufacturing capacities in the pharmaceutical sector,” India said. It called on all countries that have ratified the provision to now implement it.

UNCTAD Offers Guidance on Regional Waivers

A delegate from the UN Conference on Trade and Development (UNCTAD), WTO’s Geneva neighbour, made a statement encouraging countries to use the waiver for regional trade agreements as is allowed in the amendment.

“UNCTAD has followed this process with particular interest, due to the fact that one element of our IP-related technical assistance consists of a program that seeks to promote the local production of pharmaceutical products in developing countries and LDCs,” the delegate said in the written statement.

“While the ‘Paragraph 6 System’ has only been used once, its potentially most beneficial element has never been put into practice so far,” he said. “I refer to the specific waiver for regional trade agreements made up mostly of LDCs [least-developed countries] to facilitate the trade in and production of medicines under compulsory license in those regions.”

“Under this RTA waiver,” he added, “producers located in one of the parties to such a regional agreement are not restricted by quantity of production and certain notification and labeling requirements that usually apply in the context of the system. This may be an important tool to incentivize local production and economies of scale in regional trading blocks [sic] like for instance the East African Community.”

UNCTAD’s 2011 Guide to Using TRIPS Flexibilities to Stimulate Local Pharmaceutical Production recommended the establishment of regional pharmaceutical supply centres in regional agreements that would complement the RTA waiver.

“These Centers would pool national procurement capacities and offer the regional market to pharmaceutical producers that are willing to engage on an affordable price,” the statement said. “The new RTA waiver in the TRIPS Agreement could be of specific benefit to those producers that are located in a developing country that is part of a mostly LDC-composed RTA. Under a compulsory license these firms could produce considerable quantities of medicines for a Regional Supply Center at affordable prices without the usual quantitative restrictions.”

But he added: “In order for regional agreements to benefit from the new TRIPS provision, however, it is important to not treat IP rules in isolation. Enabling pharmaceutical production is a cross-sectoral task and requires close coordination and even harmonization of policies related to IP, drug regulation, procurement and intra-regional tariffs.”

South Centre Statement

The intergovernmental South Centre also issued a statement [pdf] on the TRIPS amendment.

Image Credits: E. Murray – Own work