TRIPS Council Serves As Ground For Discussion Of Compulsory Licensing

The escalating prices of medicines has become a growing global concern. Among many issues, intellectual property has been pointed to as providing monopolies that allow for unaffordable prices, in particular in developing countries. Though there is consensus among countries that IP is but one of the issues, the extent of the IP influence is not agreed. The use of compulsory licences as a way for developing countries to grant access to medicines to their populations was discussed during the World Trade Organization committee on intellectual property last week, with divergent opinions.

The Council for TRIPS [Agreement on Trade-Related Aspects of Intellectual Property Rights] took place from 19-20 October.

South Africa delivered a statement on behalf of Brazil, China, India, and South Africa, following the introduction earlier this year of a topic for discussion on IP and the public interest.

The TRIPS Agreement “clearly recognizes that the principles of IP protection are based on underlying public policy objectives. Article 8 of TRIPS Agreement entitled ‘Principles’ states that WTO Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement,” the South African delegate said.

The delegate cited Goal 3 (Ensure Healthy Lives and Promote Well-Being for All at All Ages) of the United Nations Sustainable Development Goals for 2030, which supports “the research and development of vaccines and medicines for the communicable and noncommunicable diseases that primarily affect developing countries. It also calls to provide “access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade Related Aspects of Intellectual Property Rights regarding flexibilities to protect public health, and, in particular, provide access to medicines for all,” the delegate said.

According to the South African delegate, the World Health Organization World Health Statistics found that new health technologies such as medicines, vaccines and diagnostics are becoming increasingly expensive.

In June 2016, the delegate said, a US District Judge of the Western District of Wisconsin issued a compulsory licence allowing Apple Computers to use a patent it had infringed, owned by the Wisconsin Alumni Research Foundation, “in return for an ongoing royalty.” This would provide for a compulsory licence, he said.

Brazil in its statement, said the balance reached by the TRIPS Agreement allows for ways to address public health challenges while maintaining IP systems that incentivise necessary research and development for new medicines.

The intellectual property system provides the basis for advancing the public interest without prejudicing the innovative efforts by companies, the delegate said, illustrating this fact with a recent German ruling granting a provisional compulsory patent licence on an antiretroviral drug ingredient. The example also shows “that this should not be a polarizing issue, as it is of interest to all Member States of this organization,” the Brazilian delegate said.

Brazil also agreed that several factors could hamper access to medicines, however the TRIPS Council’s mandate being on intellectual property issues, it should offer grounds for exchanges of views and experiences on the matter.

[Update] India in its statement said TRIPS Article 31 provides “members complete freedom to decide the grounds for issue of compulsory license.” The Indian delegate mentioned the issue of unaffordable prices of antiretroviral medicines during the 1980s and 1990s and how by using compulsory licences, countries like Brazil, Thailand, South Africa and others used the TRIPS flexibilities to bring those prices down.

The Indian delegate mentioned the compulsory licensing provisions in the United States. According to the delegate, the US law “permits for the issuance of compulsory licenses in a number of circumstances, and also allows for circumstances that are arguably akin to a compulsory license.”

He mentioned the Atomic Energy Act, the Clean Air Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the Plant Variety Protection Act as providing for compulsory licencing.

Also in the US, the delegate said, “Compulsory licenses have also been awarded as a remedy for antitrust violations and a court may decline to award an injunction in favor of a prevailing patent owner during infringement litigation, an outcome that some observers believe is akin to the grant of a compulsory license.”

A number of governments have not used the flexibilities available under the TRIPS Agreement for reasons ranging from “capacity constraints to undue political and economic pressure from states and corporations,” as stated in the United Nations Secretary General’s High-Level Panel on Access to Medicines, he said. [end update]

According to a source, China, Fiji and India also highlighted the growing concern about an imbalance between IP and the public interest at the TRIPS Council last week.

EU: No Contradiction Between IP and Public Interest

Meanwhile, the European Union in its statement said a “balanced system of intellectual property rights, which takes into account legitimate interests of users and right holders, does serve the public interest.”

The EU also said that the TRIPS provides a reasonable balance in its rules and flexibilities, and allows a pragmatic and flexible approach that can help members maximise the potential of their own intellectual assets and further their integration into international trade, while achieving broader societal welfare.

On compulsory licencing, the EU said medicines are created “not by public authorities but by the pharmaceutical industry,” which needs an “adequate return on investments to finance innovation.” It added: “The challenge is how to use all levers available to public authorities to promote affordable access to medicine without affecting negatively R&D [research and development] by the pharmaceutical industry and therefore the availability of new and innovative medicines.”

According to the EU statement, a number of causes lead to a lack of access to medicines, intellectual property seemingly playing a “minor role in the problem but a disproportionately large role in the debate.”

The EU underlined the role of tariffs, taxes, and mark-ups applied by “many countries,” which hamper access to a number of medicines included on the World Health Organization list of essential medicines, even though they are off patent. The lack of efficient procurement and healthcare systems also play a role in the problem of access to medicines, the EU delegate said.

The EU, said the delegate, “has also consistently supported the use, where necessary and justified, of the flexibilities provided under the TRIPS Agreement and the Doha Declaration with the objective of ensuring effective access to medicines for the relevant populations.”

However, the TRIPS flexibilities can be used under clear rules for “real health related” reason, and not an “industrial policy related” reason, the EU said.

 

Image Credits: William New