[Ip-health] TWN Info: NGOs voice concerns to WHO, WTO on seizure of generic drugs

[Sangeeta]

Health: NGOs voice concerns to WHO, WTO on seizure of generic drugs
 SUNS #6644 Friday 20 February 2009

Geneva, 19 Feb (Kanaga Raja) -- Sixteen public health, consumer and
development groups have sent separate letters to the heads of the World
Health Organization (WHO) and the World Trade Organization (WTO) voicing
their concerns over recent seizures by Dutch customs authorities of Indian
generic drugs shipped through the Netherlands en route to Brazil, Colombia
and Peru.

In their letter dated 18 February to WHO Director-General Dr Margaret Chan,
the NGOs asked her to "immediately undertake an assessment of the risks to
public health programs presented by such seizures and any
anti-goods-in-transit provisions that exist in current or proposed trade
agreements, including those relating to anti-counterfeiting initiatives."

In conducting the assessment, the WHO is asked to "interview developing
country governments, UN agencies and other entities engaged in the
trans-border delivery of generic medicines to developing countries, to fully
document the extent to which medicines in transit are at risk regarding
seizure or liability for infringement."

In a separate letter to WTO Director-General Pascal Lamy, the groups called
on him to "explore with the European Union the extent to which its customs
rules and provisions in trade agreements present risks to goods in transit,
and undermine the commitments made in 2001 in the Doha Declaration on TRIPS
and Public Health concerning access to medicines."

The sixteen non-governmental organizations that signed both the letters are
BUKO Pharma-Kampagne; Consumers International; Consumers Union; Essential
Action; HAI Africa; HAI Asia Pacific; HAI Europe; HAI Global; HAI Latin
America and Caribbean; Health GAP; Iqsensato; Knowledge Ecology
International; Medico International; Oxfam International; Third World
Network; and U. S. PIRG.

"In a world with territorial patent rights, it is important that the rules
for 'goods in transit' permit the transport of medicines from places where
they can be made to places where they will be used. The Dutch seizures have
drawn attention to this issue, as has the recent disclosure of MSF that they
regularly transport and temporarily store medicines in Europe, in route to
users in developing countries. We expect the leaders of the WHO and the WTO
to lead on this issue," said James Love of Knowledge Ecology International.

"It is time that the World Health Organization, the institution that we look
to for a lead in international health and development gave strong and clear
guidance on the interpretation of international trade agreements that so
adversely affect health. The health of millions of people worldwide who
depend on life-saving quality assured generic medicines will be in jeopardy
unless action is taken now by the World Trade Organization to give clear
guidance to its Members on goods in transit. This situation cannot be
allowed to continue," said Tim Reed of HAI Global.

In their letter to WHO Director-General Dr Chan, the groups said that in
recent years there has been a flurry of activity regarding new trade
agreements and rules to enforce patents and intellectual property rights.
One important aspect of those rules are measures that concern "goods in
transit." Under some legal traditions and consistent with WTO rules, goods
in transit are exempt from normal restrictions associated with patents or
other intellectual property rights, when en route to a market where the use
is legitimate.

"This approach is not uniform, however, as illustrated recently by several
seizures of medicines by Dutch customs officials," said the letter to Dr
Chan.

The groups noted that the Dutch cases involved medicines manufactured in
India, and then shipped to Brazil, Colombia and Peru, via the Netherlands.
The medicines were seized by Dutch customs officials.

Citing industry reports, the letter noted that at least four cases of Indian
generic medicines in transit in the Netherlands were seized by Dutch customs
authorities from October 15, 2008 to December 12, 2008: Clopidogrel
Bilsulphate API (to Colombia); Olanzapine 10 mg Tabs (to Peru); Rivastigmine
3 mg Tabs (to Peru); and Losartan - API (to Brazil).

According to the manufacturers, all products were legitimate generics and
did not violate any patent rights in the exporting or the importing
countries.

The groups said that the seizure of the shipment containing Losartan active
pharmaceutical ingredients (APIs) destined for Brazil was made in connection
with a complaint filed by Merck, as the licensee of European patents and
Dutch Supplementary Protection Certificates (SPCs), pursuant to Dutch law
and the procedures set out in EU Regulations. In the case of the Clopidogrel
Bilsulphate API shipments to Colombia, the Dutch customs authorities
reportedly asserted the generic APIs were counterfeits, and Sanofi Aventis
sought destruction of the goods.

The letter to Dr Chan said that the European Union is currently seeking very
aggressive provisions regarding customs procedures in a number of proposed
bilateral and regional trade agreements. The topic of provisional measures
is also a key element in the secret negotiations for a new
Anti-Counterfeiting Trade Agreement (ACTA).

According to some reports, said the NGO letter, there are proposals in the
ACTA negotiations to require the seizure of goods that infringe on patents,
even for goods in transit. Whether intentional or not, additional risks to
goods in transit are also found in the International Medical Products Anti
Counterfeiting Taskforce (IMPACT)'s "Principles and Elements for National
Legislation against Counterfeit Medical Products" and World Customs
Organization's "Provisional Standards Employed by Customs for Uniform Rights
Enforcement (SECURE)."

The groups said that they were bringing these facts to the WHO chief's
attention in part to illustrate how TRIPS plus intellectual property rules
can impede access to generic medicines in developing countries. "The
European Union rules and the actions of the Dutch customs officials are
clearly designed to disrupt the supply of legitimate generic medicines to
developing countries."

Noting that the WTO TRIPS agreement provides the option of exempting goods
in transit from the enforcement of patents, the groups said that the
European Union's rules and actions go beyond the required enforcement
standards of the WTO TRIPS agreement, and do so in a manner that is clearly
inconsistent with the 2001 Doha Declaration on TRIPS and Public Health.

Among other things, said the groups, the implementation of the WTO's
Decision of 30 August 2003 regarding the export of pharmaceutical products
to countries with inadequate manufacturing capacity, already seen as
complex, will become even more problematic if patent rights are enforced for
goods in transit.

The groups also underscored that the European Union rules and actions are
clearly in conflict with WHO resolution WHA61.21, which states that
"international negotiations on issues related to intellectual property
rights and health should be coherent in their approaches to the promotion of
public health."

WHA61.21 further calls upon member states to "take into account, where
appropriate, the impact on public health when considering adopting or
implementing more extensive intellectual property protection than is
required by the Agreement on Trade-Related Aspects of Intellectual Property
Rights."

"The importance of this issue is much broader than the cases of four seized
shipments of generic medicines to three countries. It presents enormous
risks for the WHO, UNAIDS, the Global Fund, UNITAID, and the many
development and public health agencies and other entities engaged in the
supply of medicines to developing countries that ship medicines through
Europe or other countries that sign agreements with anti-goods-in-transit
provisions," said the letter to Dr Chan.

The groups called on the WHO to "immediately undertake an assessment of the
risks to public health programs presented by such seizures and any
anti-goods-in-transit provisions that exist in current or proposed trade
agreements, including those relating to anti-counterfeiting initiatives."

"In doing this assessment, we ask that the WHO interview developing country
governments, UN agencies and other entities engaged in the trans-border
delivery of generic medicines to developing countries, to fully document the
extent to which medicines in transit are at risk regarding seizure or
liability for infringement."

The groups further asked the WHO, if its own assessment of EU regulations
uncovers these threats to public health, to communicate its concerns, and
provide relevant technical advice to the European Union with respect to its
own customs rules, and to ask the EU to re-examine provisions in trade
agreements that present risks to goods in transit.

In a separate letter to WTO Director-General Lamy, the groups, referring to
the recent seizures of in-transit medicines by Dutch customs authorities,
including cases where medicines manufactured in India were en route to
destinations in Brazil, Colombia and Peru, said that there are long-standing
traditions to provide exceptions to patent rights for aircraft and marine
vessels in route to markets, and for goods in transport, including, for
example, the specific exemption of goods in transit from the provisions of
Article 51 of the TRIPS agreement, concerning "Suspension of Release by
Customs Authorities."

According to the groups, the TRIPS agreement does not require Article 51 to
apply to patented goods, and the exception for goods in transit is
discretionary rather than mandatory. In addition, TRIPS is part of a larger
plan to "reduce distortions and impediments to international trade," and
seeks to "ensure that measures and procedures to enforce intellectual
property rights do not themselves become barriers to legitimate trade."

Article 41.1 of the TRIPS agreement provides that enforcement procedures
"shall be applied in such a manner as to avoid the creation of barriers to
legitimate trade and to provide for safeguards against their abuse" and
Article 41.2 provides that the procedures shall be "fair and equitable."

Article V of the GATT defines goods in transit, and provides that "There
shall be freedom of transit through the territory of each contracting party,
via the routes most convenient for international transit, for traffic in
transit to or from the territory of other contracting parties."

The letter to Director-General Lamy said that this provision extends to all
goods in transit, and provides that "all charges and regulations imposed by
contracting parties on traffic in transit to or from the territories of
other contracting parties shall be reasonable, having regard to the
conditions of the traffic."

The letter also noted that with regard to trade in medicines, the 2001 Doha
Declaration on TRIPS and Public Health recognized "the gravity of the public
health problems afflicting many developing and least developed countries"
and stressed "the need for the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement) to be part of the wider
national and international action to address these problems."

In Paragraph 4 of that Declaration, WTO members agreed 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 letter also voiced concerns that the implementation of the WTO's
Decision of 30 August 2003 regarding the export of pharmaceutical products
to countries with inadequate manufacturing capacity will become even more
problematic if patent rights are enforced for goods in transit.

Noting that the Dutch seizures of medicines in transit from India to South
America were made under the European Union's rules regarding customs
measures, the groups expressed concerns that these rules, and many other
rules being proposed in a plethora of new trade agreements, do not protect
legitimate sellers and buyers of generic medicines, when those goods move in
global trade.

"There are reports that the current drafts of the proposed plurilateral
Anti-Counterfeiting Trade Agreement (ACTA) does not provide adequate
protections for goods in transit, and we are also concerned about many of
the proposals regarding provisional measures and customs practices that are
seen in bilateral trade agreements."

"Should countries be free to aggressively enforce patent and other
intellectual property claims against goods in transit, or should goods in
transit be protected when they are clearly intended to markets where their
use is legitimate?" the groups asked.

This issue is particularly relevant to the challenge of providing "access to
medicine for all," a central objective of the Doha Declaration on TRIPS and
Public Health, and the World Health Organization's recent Global Strategy on
Public Health, Innovation and Intellectual Property Rights, said the letter
to Lamy.

Given the importance of this issue, the groups requested the
Director-General to explore with the European Union the extent to which its
customs rules and provisions in trade agreements present risks to goods in
transit, and undermine the commitments made in 2001 in the Doha Declaration
on TRIPS and Public Health concerning access to medicines.

Meanwhile, the medical humanitarian organization Medecins Sans Frontieres
(MSF) earlier sent a letter to Mr Laszlo Kovacs, European Commissioner for
Taxation and Customs Union, and Baroness Catherine Ashton, European
Commissioner for Trade, following the seizure of medicines in transit in the
EU to developing countries for alleged patent infringement.

In its letter, the group expressed concern over the potential consequences
of the recent seizure of medicines in transit in the EU to developing
countries for alleged patent infringements on the basis of the Council
Regulation (EC) No 1383/2003 by Dutch customs authorities.

Citing the recent case involving the seizure by customs authorities in
Holland of losartan potassium, a generic version of the active ingredient
for a patented drug used to treat high blood pressure, manufactured in India
by the generic company Dr Reddy and in transit to Brazil, MSF expressed
concern that the establishment of a precedent in EU countries to use such
provisions to intercept legitimate trade between generic manufacturers and
developing countries could severely impact the affordability and
availability of medicines in developing countries.

It pointed out that the EC Regulation No 1383/2003 goes beyond the
obligations required under the TRIPS Agreement in relation to customs
authorities as set out in Article 51 of the TRIPS Agreement. The footnote of
the same article states that "It is understood that there shall be no
obligation to apply such procedures to imports of goods put on the market in
another country by or with the consent of the right holder, or to goods in
transit."

The EC Regulation No 1383/2003 nonetheless applies such procedures to goods
in transit, said MSF.

Many countries do not have manufacturing capacity to produce medicines, or
rely on importing more affordable generic medicines from abroad in order to
treat their population. As such, the trade in legitimate medicines between
countries is fundamental to ensuring access to medicines for millions.
Provisions to ensure such countries can access medicines, enshrined in the
Doha Declaration and the WTO August 30th decision, cannot be implemented
effectively if on key transit routes, the risk exists that supplies can be
regularly subject to interception based on assertion of patent infringement
in the transit country, said MSF.

MSF was concerned that its own medicine procurement activities may be
affected by the EU customs authorities' use of the Regulation. "Such actions
may have a chilling effect on exporters and require alternative and
potentially more expensive transit routes to be used that would inhibit the
supply of generic medicines both to developing countries and to humanitarian
organisations such as MSF who have logistical centres based in Europe."

It called on the European Commission to: Clarify its position regarding the
implementation of the EC Regulation No 1383/2003 with regard to
pharmaceutical products; review the effect of the EC Regulation No 1383/2003
on the supply of legitimate medicines, given the EU stated commitment to the
full implementation of the Doha Declaration on TRIPS and Public health and
the WTO August 30th decision; and clarify whether such provisions are
proposed for inclusion in EPAs and in the current negotiations of the EU
Free Trade Agreements. +