[Ip-health] SUNS: WTO should review TRIPS/health decision in view of avian flu

[thiru@cptech.org]

Health
WTO should review TRIPS/health decision in view of avian flu

*Geneva, 25 Oct (Kanaga Raja)* - In light of the current situation of a
possible avian flu pandemic and other emergencies, Consumers
International (CI) has called on members of the WTO TRIPS Council to
immediately begin a review of the intellectual property rules and
practices that are currently in place to address public health problems.

The international non-profit organization issued this call Tuesday in a
statement addressed to the TRIPS Council, which is meeting this week to
take up amongst other issues the 30 August 2003 decision regarding the
implementation of Paragraph 6 of the Doha Declaration on TRIPS and
Public Health.

Consumers International, which represents the rights of consumers
globally, also requested the TRIPS Council to immediately issue a
clarification on how members who have opted out of the 30 August 2003
decision may opt back in.

The 30 August 2003 decision by the WTO General Council relates to
ensuring access to medicines to countries with no or inadequate drug
manufacturing capacity.

Paragraph (f) of Article 31 of the TRIPS Agreement provided that
compulsory licenses must be granted mainly to supply the domestic
market, but the Doha Ministerial Conference in 2001 decided that this
should be changed so that countries unable to manufacture the
pharmaceuticals could obtain cheaper copies elsewhere if necessary.

The WTO General Council on 30 August 2003 decided to allow generic
copies made under compulsory licenses to be exported to countries that
lack production capacity, under certain conditions and procedures.

All WTO member countries are eligible to import under this decision, but
23 developed countries are listed as announcing that they will not use
the system for imports.

In a separate statement that is not part of the waiver, 11 other members
announced voluntarily that they would only use the system as importers
in situations of national emergency or other circumstances of extreme
urgency.

According to the CI statement, the provision for countries to opt out of
importing generic drugs to address public health crises does not serve
the interests of consumers anywhere. It creates a strong likelihood that
the costs of producing stockpiled medicines will be high, particularly
for active pharmaceutical ingredients, which are very sensitive to
economies of scale and competition.

It will also reduce the capacity to produce, and will result in lower
levels of stockpiles everywhere. This, CI said, puts everyone North and
South at risk of potentially preventable death and suffering should an
avian flu pandemic occur.

As this week's TRIPS Council meets to review the effectiveness of the
implementation of the 30 August 2003 decision, CI urged WTO members to
consider the simple question: 'Is the current system working?'

In light of the current situation with respect to avian flu, CI called
on the TRIPS Council to immediately issue a clarification on how members
who have opted out of the 30 August 2003 decision may opt back in.

Furthermore, the CI statement asked the TRIPS Council to immediately
begin a review of the intellectual property rules and practices that are
in place to address public health problems, including but not limited to
the case of a possible avian flu pandemic.

This review should include:

( a) an assessment of the medical threats to the public health that an
avian flu pandemic, SARS (severe acute respiratory syndrome) or other
emerging health threats present;

( b) an assessment of the degree to which WTO members have prepared for
such cases, including the stockpiling of medicines for an avian flu
pandemic or other important threats;

( c) the degree to which the actual management of intellectual property
policies and practices are consistent with the 2001 Doha mandate, that
WTO members implement laws in a manner that is consistent with the
protection of public health and access to medicine for all; and

( d) the degree to which the TRIPS Agreement and its implementation by
WTO members should be modified in order to ensure that effective
measures are taken to protect the public from such emergencies.

The CI statement also came with an explanatory note providing details on
the issue. According to the note, compulsory licensing of patents is
consistent with the TRIPS agreement, and WTO members are free to choose
the grounds for doing so.

Despite countless news reports to the contrary, compulsory licensing is
not limited to cases of emergencies or even to public health.

That said, it is timely and important to highlight public health
emergencies as an important special case, and one that illustrates:( 1)
the vast gap between official rhetoric and performance in terms of
essential protections for public health; and (2) flaws in the 'solution'
to the problem of exporting medicines manufactured under a compulsory
license.

On the fears of an avian flu pandemic, under the best circumstances,
assuming that the new virus causes mild disease, the world could still
experience an estimated 2 million to 7.4 million deaths.

Despite an advance warning that has lasted almost two years, the world
is ill prepared to defend itself during a pandemic. The WHO has urged
countries to stockpile anti-viral drugs for use at the start of a
pandemic. Around 30 countries are purchasing large quantities of these
drugs, but the manufacturer has no capacity to fill these orders
immediately.

On present trends, the CI note said, most developing countries will have
no access to vaccines and anti-viral drugs throughout the duration of a
pandemic.

The WHO has received a promise for a donation of some 3 million doses of
oseltamivir (Tamiflu) from Roche. The US has a target of providing
vaccines for 20 million persons and anti-virals for another 20 million,
but only a fraction of this is actually available today.

The CI note cited the WHO as saying: "On present trends, most developing
countries will have no access to vaccines and anti-viral drugs
throughout the duration of a pandemic."

There are two causes for the small stockpiles - capacity and price.
Roche and Gilead, the two firms that control the relevant patents on
oseltamivir, have been unwilling or unable to expand production of the
medicine, and have yet to freely license their patents to generic suppliers.

According to the CI note, the WHO estimates that it would take a decade
for Roche to manufacture the desired oseltamivir stockpiles. There has
also been very little demand from governments for stockpiles of
oseltamivir, because of the high prices that Roche has charged - $6 per
dose in some press reports.

Governments all over the world are now making announcements that they
will consider compulsory licenses for the oseltamivir patents. These
include members of the US Congress, as well as governments in Argentina,
Korea, the Philippines and Thailand.

The CI note said that Roche is now carrying out a public relations and
damage control effort to salvage as much control over the patents as
possible. There is also need for addressing increased generic supplies
of zanamivir and other medicines, for example.

[According to recent media reports, Roche, under pressure from the US,
has agreed to give the license to manufacture Tamiflu to four US generic
drug manufacturers.]

The CI note also highlighted a particular problem (about issuing
compulsory licenses) concerning the nature of the 30 August 2003
decision regarding the implementation of Paragraph 6 of the Doha
Declaration on TRIPS and Public Health.

CI highlighted one of the problems, i.e. the 'opt-out' provision that
countries may elect as importers, and the mandatory 'opt-in' provisions
for both importers and exporters.

First, the WTO TRIPS Council should reflect that no countries have
notified the WTO that they intend to use the 30 August 2003 decision as
either an importer or an exporter. Given the current situation, this
raises profound questions about the way the global community perceives
the 30 August 2003 decision.

With populations at a growing risk of a public health emergency, and the
clear evidence that stockpiles of medicine are far under-sourced, "the
lack of WTO notifications is damning evidence that the current system is
not working."

Second, CI said, is the fact that 23 countries opted out as importers,
and another ten were required to opt-out by the EC as a condition of
joining the EU. As a consequence, hundreds of millions of people will
likely be unable to obtain generic medicines for stockpiles, as they
will not have the domestic capacity to manufacture the medicines. These
include virtually everyone from the United States to Latvia.

The decision to opt-out of the 30 August 2003 decision, even for a
national emergency, is either evidence that the decision is highly
unworkable and irrelevant for these countries, or that trade officials
want to allow their own populations to go without life-saving medicines
in a time of emergency, the CI note said.

The fact that 33 countries are opting out has undermined the legitimacy
of the 30 August 2003 decision, and is partly responsible for the
reticence of developing countries to openly use this decision, said CI.

In a scenario of an avian flu pandemic, CI said that even if some
countries have sufficient or excessive stockpiles of generic medicines,
they would not be able to share medicines across borders. Estonia,
Poland, UK, Greece, Latvia, France, the Netherlands, New Zealand,
Australia, the US and other members of the group of opt-out countries
will each be in a state of autarky, an ironic obligation to be imposed
on them by an organisation officially devoted to liberalised trade.

The opt-out provision does not serve the interests of consumers
anywhere, added CI. It creates likelihood that the costs of producing
stockpiled medicines will be high, particularly for active
pharmaceutical ingredients, which are very sensitive to economies of
scale and competition. It will also reduce the capacity to produce and
will result in lower levels of stockpiles everywhere.

CI also urged the TRIPS Council members to consider the implications of
the terms of exclusivity for the protection of pharmaceutical test data
on access to medicines. Under Article 39.3 of the TRIPS Agreement,
members are required to protect pharmaceutical test data used for
marketing approval by regulatory authorities against unfair commercial use.

However, in the implementation of Art 39.3, certain WTO members have
chosen to grant exclusive rights to rely upon pharmaceutical test data
which is used for the registration of medicines. This practice erects
barriers to generic competition because it is expensive, time consuming
and sometimes unethical to replicate the tests.

The term of such protection generally ranges between five and ten years
in countries that have adopted this system. In the event of a public
health crisis, such type of legislation would mean that countries would
have to wait five to ten years depending on the period of exclusive
rights before there could be generic competition.

CI believed that any country that creates exclusive rights in health
registration data undermines the mandate of paragraph 4 of the Doha
Declaration, which asserts that the TRIPS Agreement "can and should be
interpreted and implemented in a manner supportive of WTO members' right
to protect public health and, in particular, to promote access to
medicines for all."

The CI note also said that the 30 August 2003 decision by the WTO
General Council was widely criticized by public health groups on the
grounds that it was restrictive, complex and protectionist.

It allows wealthy countries to export to poor countries, while
restricting imports from poor countries to rich countries. It does not
explicitly recognise insufficient economies of scale or comparative
advantage as a basis for determining eligibility for importing
countries, even though the realisation of efficient scale economies and
favourable comparative advantage is one of the main putative advantages
of liberalised trade.

Decisions regarding remuneration are made in exporting rather than
importing countries, while the procedures for compulsory licensing for
export for public health reasons are far more complex and burdensome
than are required for compulsory licensing for domestic use, or when
compulsory licenses are issued as a remedy to anti-competitive practices
under Article 31.k and Article 40 of the TRIPS Agreement.

The African Group proposal seeks to solve some of the problems with the
30 August 2003 decision by the WTO General Council, and should be
supported, the CI recommended.