[Ip-health] Scrip story on opt-out of WTO export provisions

[James Love]

* Two activist groups have criticised the opt-out decision. The
Consumer Project on Technology, a US-based group that lobbies for the
weakening of the patent system, has written to the US Trade
Representative to call on the US to opt in. It calls the opt-out
measure a "mistake in trade policy that puts US citizens at risk in
the event of an outbreak of bird flu". It says the "USTR should
notify the WTO that it now considers itself eligible to import
generic medicines under the August 30th, 2003, WTO decision."

* Consumers International, a federation of 234 consumer bodies in 113
countries, is calling on the TRIPS Council to assess the
effectiveness of the August 30th decision. "In light of the current
situation with respect to avian flu, Consumer International requests
the TRIPS Council to immediately issue clarification on how members
who opted out of the August 30th decision may opt back in."

*  William Cook, a partner who specialises in patent law at Simmons &
Simmons, told Scrip that the opt-out part of the decision was crucial
to the overall deal.  "For one party, say the US, to go back on the
opt-out clause would act against the whole decision," he said. He
believes that the US can force a compulsory licence on Roche in the
US, but could not overseas as it has opted out from being an
importing country.


S00900044 - Scrip

Activists hit out at rich countries' Tamiflu opt-out

FILED 25 October 2005  COPYRIGHT T&F Informa UK Ltd 2005

23 high-income countries, including the US and those in the EU, have
been criticised for opting out from importing Roche's Tamiflu
(oseltamivir) in the event of an influenza outbreak, a move made
possible by their signing up to a World Trade Organization decision
in 2003.

The now famous decision, called the August 30th text, aimed to
address the World Trade Organisation's TRIPS agreement on
intellectual property rights in relation to poor countries without
manufacturing capacity. It permits a pharmaceutical manufacturer,
under compulsory licence, to export to another country without
manufacturing capacity.

All WTO member countries are allowed to import medicines under this
decision, bar 23 that opted out from doing so (plus a further 10
countries that joined the EU in May 2004). There are also a number of
countries that voluntarily opted out (see table below). The rich
countries decided to opt out to prevent cheaper medicines entering
their markets, which some activists have called a protectionist measure.

In practice, countries such as the US, Australia, Japan and France
would not be allowed to import Tamiflu from poorer countries such as
India if they faced a public health crisis. They, of course, could
issue compulsory licences to have the drug manufactured locally.

Two activist groups have criticised the opt-out decision. The
Consumer Project on Technology, a US-based group that lobbies for the
weakening of the patent system, has written to the US Trade
Representative to call on the US to opt in. It calls the opt-out
measure a "mistake in trade policy that puts US citizens at risk in
the event of an outbreak of bird flu".

It says the "USTR should notify the WTO that it now considers itself
eligible to import generic medicines under the August 30th, 2003, WTO
decision."

Countries that opted out from importing medicines under the
August 30th decision
Original countries
Australia      Austria
Belgium        Canada
Denmark        Finland
France         Germany
Greece         Iceland
Ireland        Italy
Japan          Luxembourg
Netherlands    New Zealand
Norway         Portugal
Spain          Sweden
Switzerland    UK
US
New countries that joined EU in May 2004
Czech Republic  Cyprus
Estonia         Hungary
Latvia          Lithuania
Malta           Poland
Slovak Republic Slovenia
Countries that voluntarily said they would use the system as
importers in national emergencies
Hong Kong      Israel
South Korea    Kuwait
Macao China    Mexico
Qatar          Singapore
Chinese Taipei Turkey
United Arab Emirates
Source: WTO

The WTO's TRIPS Council is holding a meeting this week, which will
partly look at implementing the August 30th text permanently into the
TRIPS Agreement, a long-running saga in which numerous deadlines have
been broken. Most countries hope that the decision will be
implemented into TRIPS at the sixth WTO ministerial meeting in Hong
Kong on December 13th-18th.

Consumers International, a federation of 234 consumer bodies in 113
countries, is calling on the TRIPS Council to assess the
effectiveness of the August 30th decision. "In light of the current
situation with respect to avian flu, Consumer International requests
the TRIPS Council to immediately issue clarification on how members
who opted out of the August 30th decision may opt back in."

not possible?
But some commentators believe it is not possible for the opt-out
countries to opt in now. William Cook, a partner who specialises in
patent law at Simmons & Simmons, told Scrip that the opt-out part of
the decision was crucial to the overall deal.

"For one party, say the US, to go back on the opt-out clause would
act against the whole decision," he said. He believes that the US can
force a compulsory licence on Roche in the US, but could not overseas
as it has opted out from being an importing country.

The WTO has preferred to remain silent on the legal interpretation of
the opt-out clause, but sources familiar with the WTO told Scrip: "We
won't know definitively unless someone brings a case against the US
[or any country that decides to opt in] in the WTO's dispute
settlement procedure."

For some the discussion on the opt-out clause is theoretical as it is
unlikely that the US will lack domestic manufacturing facilities to
produce Tamiflu. But this could change in the event of a pandemic, as
the US currently only has sufficient stockpiles to supply fewer than
2% of Americans.

Full Title: SCRIP - World Pharmaceutical News - http://www.scripnews.com

FILED 25 October 2005  COPYRIGHT T&F Informa UK Ltd 2005