[Ip-health] Rushed Deal on TRIPS and Public Health
Sangeeta
ssangeeta@myjaring.net
Wed Dec 7 04:00:16 2005
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Please post this.
The story below was written before the Decision on the amendment was
adopted. It provides an account of events that took place over the last few
days (since Friday) as Members have been engaged in intense and rushed
consultations to approve a deal on TRIPS and Public Health prior to the Hong
Kong Ministerial.
Members agreed yesterday to amend the TRIPS Agreement and incorporate the
mechanism in the August Decision, making it a permanent feature of the TRIPS
Agreement.
No one knows whether this mechanism will facilitate access to medicines for
countries that have no manufacturing capacity. Health activists working at
the local level have indicated that this system is too complex too work. 53
NGOs in a joint statement have been appealing to WTO members to reject this
bad deal on medicines.
In any case, time will tell whether negotiators in the WTO were wise to rush
into a deal when the workability of the mechanism is uncertain.
Best
Sangeeta
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SUNS #5931 Wednesday 7 December 2005
south-north development monitor SUNS [Email Edition]
Trade: Rushing through a "permanent solution" for TRIPS and Health
Geneva, 6 Dec (Sangeeta Shashikant) -- Intense and rushed formal and
informal
consultations have been taking place since last Friday to find agreement
among
WTO Members on the content of an amendment to the TRIPS Agreement, which
is to constitute a "permanent solution" for facilitating the supply of
medicines to
countries with insufficient or no drug manufacturing capacity.
This is in relation to paragraph 6 of the Doha Declaration on TRIPS and
Public
Health of 2001, in which the TRIPS Council was directed to resolve this
problem
of supply.
The amendment being discussed over the past few days is based on the
Decision
adopted by the WTO General Council on 30 August 2003. That decision,
involving essentially a waiver of a limitation in Article 31(f) of the TRIPS
Agreement together with several conditions and procedures for its use, was a
"temporary solution", and efforts have been made to find a "permanent
solution" in
the past two years.
Just before the 30 August 2003 decision was adopted, a statement was read by
the
Chairman of the General Council comprising some "shared understandings."
This
statement contained further conditions and procedures. The reading of this
statement was a condition by the US for agreeing to the temporary waiver.
The "permanent solution" that is being discussed basically constitutes
converting
the temporary waiver contained in the Decision (together with the conditions
for
the use of the waiver contained in the Decision) into an amendment of the
TRIPS
Agreement.
As part of the package being discussed for adopting the "permanent
solution", the
content of the 30 August 2003 Chairman's statement is also to be read out by
the
Chair of the General Council just before the "permanent solution" is adopted
by
the Council.
By Sunday, members had almost reached agreement on the final package in
relation to the amendment. Several delegations are still waiting to receive
the
"go-ahead" from their capitals on this package. A decision is expected to
be taken
by the TRIPS Council late on Tuesday afternoon, to forward the proposed
amendment of the TRIPS Agreement to the General Council. The General
Council, which is to convene right after, is expected to adopt the
amendment.
One of the contentious issues still outstanding is a request by the Chairs
of the
General Council and the TRIPS Council that there be no statement by any
delegation (not even to thank or congratulate the Chairs) before or after
the
adoption of the decisions at both the Councils. Some delegates believe that
this is
a curb on their rights, and also sets a bad precedent. It is believed that a
few
delegations would like to exercise their right to make a statement.
It is understood that the aim of the Chairs' requests is to avoid
reservations or "own
interpretations" being put in by members on the amendment and the Chairman's
Statement. In August 2003, the Philippines made a statement at the TRIPS
Council before the adoption of the decision, expressing its own
understanding.
The Decision is essentially a waiver of the TRIPS Article 31 (f) limitation
that
compulsory licenses should be predominantly for the supply of the domestic
market. Patent experts and public-interest health groups have criticized the
Decision for containing numerous procedures that exporters and importers of
generic medicines have to comply with, making the system difficult to use
and
creating barriers to access to medicines.
The Chairman's statement adds further burdensome obligations that many
experts
say are a disincentive for generic producers.
The TRIPS Council has been mandated in paragraph 11 of the Decision, to
initiate
work on the preparation of an amendment to the TRIPS Agreement.
There had not been much movement towards an amendment of the TRIPS
Agreement since last December when the African Group submitted its proposal
for
an amendment. This proposal sought to simplify the Decision by dropping many
of
the procedural barriers and disregarding the Chairman's statement. This
proposal is
widely supported by civil society and other developing country members as a
basis
to rethink the mechanism established by the Decision.
In recent months, the EU and the US have been engaging the African Group in
consultations and many informal proposals have come out of these
consultations,
but with no concrete agreement among members. One sticking point in those
consultations was how to treat the Chairman's statement.
Developing countries generally do not want this statement mentioned anywhere
in
the amendment, while the US had been pushing for such a reference to be
made, in
order to strengthen its legal status.
Consultations on this matter took a new turn recently when the Chair of the
General Council, Ambassador Amina Mohamed of Kenya, made personal appeals
to delegations to agree on amending the TRIPS Agreement. Following this
appeal,
it was proposed to delegations that the basis of the amendment would be the
Decision in its entirety and a re-reading of the Chairman's statement, with
no
reference whatsoever to the statement in the amendment.
The African Group looked favourably on this proposal as it is very keen that
there
be a decision on an amendment to the TRIPS Agreement prior to the Hong Kong
Ministerial. The implication is that the Group has effectively dropped its
original
December 2004 proposal of amending parts of the Decision.
The interest shown by Ambassador Amina Mohamed as well as by the Chair of
the
TRIPS Council and the keenness of the African Group, put significant
pressure on
other developing country delegations to engage on the proposal that was
being put
forward to them by the two Chairs and to quickly reach an agreement on some
sort
of an amendment of the TRIPS Agreement, to reflect the Decision.
Many of these delegations felt they were being unnecessarily pressured to
agree to
a "package", wherein the main document had only been given on Friday
afternoon
(with other documents, such as a new Chairman's statement and a
"choreography"
for the adoption of the amendment being given on Sunday). Moreover, they
needed time to consult their capitals.
Some delegations are also of the view that there is no urgency to decide on
an
amendment, especially since the waiver in the Decision will stay in effect,
as "it
shall terminate for each Member on the date on which an amendment to the
TRIPS
Agreement replacing its provision takes effect for that Member" according to
paragraph 11 of the Decision.
Some of these delegations are also of the opinion that the mechanism in the
Decision should first be tested as to whether it facilitates access to
medicines,
before making it a permanent feature of the TRIPS Agreement.
This view is also widely held by civil society, particularly by the
health-related
NGOs, which called it a "bad deal on medicines". In a joint statement sent
to the
delegates on Monday, 31 NGOs have stated that an amendment to the TRIPS
agreement should not be made until there is certainty that the mechanism
established by the amendment will promote access to medicines to countries
with
no manufacturing capacity. The number of NGO sign-ons to the joint statement
has increased to 53.
They added that the mechanism set up in the Decision has not been tested and
its
workability is uncertain, thus it should not be made a permanent feature of
the
TRIPS Agreement, particularly since the lives of millions of people depend
on an
effective mechanism.
According to one African delegate, the proposed amendment provides
predictability and certainty to exporters and importers. On why there was
need for
an amendment to be made before Hong Kong, another African diplomat said the
matter should not be discussed in the Hong Kong Ministerial as there is a
strong
possibility that a worse outcome will emerge if such technical details are
left to
Ministers to agree on, as they are not familiar with the issue and there
could be
pressure applied by developed countries during the Ministerial.
The proposed amendment would add a new Article (Article 31 bis) to the TRIPS
Agreement following the original Article 31. Article 31 bis contains 5
important
waivers that were in the Decision. In particular, it waives an exporting
country
from being limited by the condition of "predominantly for the supply of the
domestic market" (Article 31 (f) of the TRIPS Agreement), in cases where a
compulsory license is issued for the purposes of production of a
pharmaceutical
product and its export to an importing country which has insufficient or no
manufacturing capacity.
However, to use Article 31 bis Members have to follow certain procedures and
these are laid out in an Annex to the TRIPS Agreement (the system).
According to
a legal expert, the Annex is an integral and thus an operative part of the
TRIPS
Agreement.
Further, under Article 31 bis, if a compulsory license in granted in the
exporting
country for a product, remuneration shall be paid to the patent holder in
that
country. Where a compulsory license is granted for the same product in the
importing Member under the system established, the importing Member is
waived
from having to pay remuneration.
It also provides that regional groupings where "at least half of the current
membership of which is made up of countries presently on the UN list of
least
developed countries" the limitation of Article 31 (f) shall not apply "to
the extent
necessary to enable a pharmaceutical product produced or imported under a
compulsory license in that Member to be exported to the markets of those
other
developing or least-developed country parties to the regional trade
agreement that
share the same health problem". Generally, it is understood that this
provision
mainly applies to regional groupings in Africa.
Besides that, Article 31 bis and the Annex is without prejudice to the
rights,
obligations and flexibilities that Members have under the TRIPS Agreement
including those reaffirmed by the Declaration on TRIPS and Public Health.
The fifth waiver is that Members shall not challenge any measures taken in
conformity with the provisions of Article 31 bis and the Annex under
Articles 1(b)
and 1(c) of Article 23 of the GATT, which are provisions on non-violation
complaints.
Currently there is a moratorium on the applicability of these provisions to
the
TRIPS Agreement. This issue has yet to be resolved among members; therefore,
some developing countries raised the fact that this provision should not
prejudge
the resolution. During the consultations, it was proposed that the Chair of
the
General Council will make a short statement on this matter.
The Annex, which basically reproduces parts of the 30 August 2003 decision
that
are not in Article 31 bis, contains definitions of "pharmaceutical product",
"eligible importing member" and "exporting member" that qualify to use the
system established by the amendment.
It also outlines procedures that the eligible importing member has to
follow, such
as notification to the TRIPS Council on ( a) the names and quantities of the
product needed, ( b) confirmation that it has established that it has
insufficient or
no manufacturing capacity in the pharmaceutical sector for the product in
question,
( c) confirmation if there is a patent, it has granted or intends to grant a
compulsory
license in accordance to Article 31, 31 bis and the Annex of the Agreement.
For the exporting country, the compulsory license issues must contain
conditions
that:
( I) only amounts necessary to meet the needs of the eligible importing
Member
may be manufactured under the licence and all this production shall be
exported to
the Member which has notified its needs to the TRIPS Council;
( ii) products produced under the licence shall be clearly identified as
being
produced under the system through specific labelling or marking. Suppliers
should
distinguish such products through special packaging and/or special
colouring/shaping of the products themselves, provided that such distinction
is
feasible and does not have a significant impact on price; and
( iii) before shipment begins, the licensee shall post on a website
information on
the quantities being supplied to each destination and the distinguishing
features of
the product referred to.
The exporting Member shall also notify the TRIPS Council of the grant of the
licence, including the conditions attached to it. Information shall include
the name
and address of the licensee, the products for which the licence has been
granted,
the quantity for which it has been granted, the country to which the product
is to be
supplied, the duration of the licence, and the website address.
The Annex also provides that Members shall take measures to deal with the
problem of diversion of products. It recognizes that the desirability of
promoting
technology transfer and capacity building in the pharmaceutical sector to
overcome
the paragraph 6 problem. It further provides that the TRIPS Council shall
review
annually the functioning of the system with a view to ensuring its effective
operation and shall annually report on its operation to the General Council.
An Appendix to the Annex outlines how the assessment of manufacturing
capacities will be undertaken in the pharmaceutical sector. LDCs are deemed
to
have insufficient or no manufacturing capacities in the pharmaceutical
sector.
Other eligible importing Members with insufficient or no manufacturing
capacity
has either to establish it has no manufacturing capacity in the
pharmaceutical
sector; or where it has some manufacturing capacity that it is currently
insufficient
for the purposes of meeting its needs. When such capacity has become
sufficient,
the system shall no longer apply.
How to treat the Chairman's Statement of 30 August 2003 has been the main
sticking point during recent months' informal consultations between the
African
Group, the US and the EU.
The US has until recent days been insisting on referencing the Chairman's
statement in some way in the text of the amendment. The African Group
rejected
this as it feared this would elevate the status of the Chairman's statement.
Many
other developing countries, including India and Brazil, had also made clear
that
they could not accept any permanent solution that elevated the status of the
Chairman's statement.
The Decision when it was adopted in 2003 did not have any reference to the
Chairman's statement. It was the Secretariat, that on it own initiative
added an
asterisked note in subsequent versions of the Decision document linking the
Decision to the Chairman's statement.
In the recent days' consultations, the understanding is that there would be
no
mention of the Chairman's statement in the amendment (either in the main
text or
annex). However, a new Chairman's statement, with similar substantive
contents
to the 2003 Statement, will be read by the Chair of the General Council
prior to the
adoption of the amendment.
While agreeing to this approach in principle, the US had in the past few
days'
consultations tried some ways to make reference to the Chairman's statement
in
other related documents.
One of its proposal was that the preamble of the Decision of the General
Council
on the Amendment of the TRIPS Agreement would include that "the relationship
between the statement of the General Council Chairman and the amendment will
be the same as the relationship between the 30 August 2003 Statement of the
General Council Chairman and the General Council Decision of 30 August
2003".
This was not agreeable to other members.
During the consultations, the WTO Secretariat produced a draft decision of
the
General Council on the amendment. It contained a footnote at the end of the
sentence "Recalling the paragraph 11 of the General Council Decision of 30
August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on
the
TRIPS Agreement and Public Health".
The footnote stated "Document WT/L/540 and Corr 1". The former is a
document
number for the August Decision (which contains a footnote on the Chairman's
statement), while the latter refers to a recent information note issued by
the
Secretariat, with a new and corrected version of that footnote.
The footnote had been objected to by many developing countries as it had not
been
present in the original Decision document that was adopted by the General
Council
in August 2003. They have been insisting that the footnote be removed. In
the last
few days' consultations, they rejected the reference (in the new draft
decision) to
the two documents as these contain the controversial footnote.
In a draft document prepared by the WTO Secretariat containing the TRIPS
Council Decision to submit the proposed amendment of the TRIPS Agreement to
the General Council for adoption, a reference to forward the Chairman's
statement
was included as well. The developing countries also insisted that this
reference be
removed. Another controversial issue that was hotly discussed was how to
manage
the reading of the Chairman's statement at the TRIPS and General Council.
According to diplomatic sources, the US does not want any Member to make any
statement either prior to or after the Chairman's statement is read. This is
to avoid
a situation in which developing countries could place on record their own
understanding or interpretation of the amendment or the new Chairman's
statement.
In August 2003, the Philippines made a statement prior to the approval of
the texts
at the TRIPS Council. It said that "while the Chairman's Statement
'represented
several key shared understandings of Members', it did not represent all the
understandings shared by the membership." It then went further to provide
what it
believed to be Members' understandings on the key aspects of the August
Decision.
During the consultations, a document was given to members outlining a
so-called
"choreography" containing 9 steps to be followed to adopt the amendment. The
9
steps are as follows:
1.The Council for TRIPS would agree, without other statements before or
after its
agreement, to forward a proposal to the General Council containing the draft
Decision on the Amendment and the text of the Statement to be read out by
the
Chairman of the General Council prior to the adoption of the Decision by the
General Council.
2. The proposal would be introduced in the General Council by the Chairman
of
the Council for TRIPS.
3. Representatives of the 11 partial opt-out Members would then make
statements
in the General Council regarding their intention to use the system as an
importer,
only in situations of national emergency or other circumstances of extreme
urgency. If they do not make such a statement, it would be expected that
they
would have sent a letter in advance to this effect.
4. The Chair of the General Council would then state that "it is understood
that
paragraph 4 of Article 31bis in the proposed amendment is without prejudice
to
the overall question of the applicability of subparagraphs 1(b) and 1(c)
Article
XXIII of GATT 1994 to the TRIPS Agreement and to the different positions of
Members on this subject".
5. The Chair of the General Council would then read out the Chairman's
Statement.
6. The Chair of the General Council would then propose that the General
Council
take note of the statements and, in the light of the Chairman's Statement
she had
just read out, adopt the draft decision.
7. The General Council would then so agree.
8. The Chair of the General Council would then state that Members have asked
her
to state, on their behalf, that Members reaffirm the statements they made
after the
adoption of the General Council Decision of 30 August 2003, and propose that
the
General Council consider this done. The General Council would then so agree.
9. No further statements would be made and the meeting would be closed.
Some observers as well as diplomats commented that it was strange that the
WTO
was now turning to "choreography" to ensure that its members obediently
follow
procedures that request that they give up their right to make their views
known
before and after adopting an important decision.
It is not known, at press time, whether this choreography will be followed.
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