[Pharm-policy] EU position on TRIPs and Access

[James Love]

-------- Original Message --------
Subject: [Ip-health] EU position on TRIPs and Access
Date: Tue, 19 Jun 2001 13:05:48 +0200
From: Seco_GERARD@amsterdam.msf.org
To: e-drug@usa.healthnet.org, Ip-health@venice.essential.org



The EU seem to get closer to a public health interpretation of some of the
TRIPs articles.... can still be improved, but moving in the "right"
direction...
----------------------------------------------------------------------


COMMUNICATION FROM THE EUROPEAN COMMUNITIES
AND THEIR MEMBER STATES


   The following communication, dated 11 June 2001, has been received from
the European Communities and their member States with the request that it
be circulated to Members.

_______________


THE RELATIONSHIP BETWEEN THE PROVISIONS OF THE  TRIPS AGREEMENT AND ACCESS
TO MEDICINES


BACKGROUND

1. At the last session of the TRIPS Council (2-5 April 2001), the Africa
Group proposed that one day be set aside at the June session to clarify the
interpretation and/or application of certain provisions of the TRIPS
Agreement.  The discussion is intended to examine the relationship between
intellectual property and access to medicines and will seek to bring
clarity regarding the interpretation and the application of the provisions
of the Agreement which provide scope for Members to address public health
concerns.  The European Communities (EC) and their member States, together
with most other delegations, welcomed and supported this initiative.  It is
an important development, since it will be the first time that the TRIPS
Council discusses intellectual property issues in the context of public
health.
2. In view of the urgent need to fight communicable diseases, the EC and
their member States have already taken a number of initiatives in the area
of access to affordable medicines for developing countries. On 14 May 2001,
the Council of Ministers endorsed the Commission's comprehensive Programme
for Action targeted at the combating of the major communicable diseases.
The Council's Resolution focuses on three main goals:  maximising the
impact of existing interventions, increasing the affordability of key
pharmaceuticals, and increasing investment in research and development of
specific global public goods.
3. The main objective of EC development policy, as set out in COM (2000)
212 of 26 April 2000, is to foster sustainable development with a view to
eradicating poverty in developing countries and to integrating them into
the world economy. It is now clear that certain strategic interventions, if
implemented effectively, have the potential to reduce disease and suffering
and promote prosperity, thereby contributing to a more secure world for
all.  However, major communicable diseases, such as HIV/AIDS, malaria and
tuberculosis, continue to act as a brake on human development.
4. For this reason, the European Commission adopted, in September 2000, a
new policy framework set out in its Communication entitled 'Accelerated
action targeted at major communicable diseases within the context of
poverty reduction' (COM (2000) 585 of 20 September 2000). This was followed
up by a 'High-level Round Table' held in Brussels on 28 September 2000 ,
and by a Resolution of the Council on 10 November 2000 (Doc 13127/00, Annex
II), which called on the Commission to draw up an action plan.
5. The Commission proceeded to develop a Programme for Action on
accelerated action on HIV/AIDS, malaria and tuberculosis in the context of
poverty reduction over the next five years. The Programme for Action (COM
(2001) 96 was adopted by the Commission on 21 February 2001 (see website
http://www.cc.cec:8082/comm/development/sector/social/health_en.htm).

6. The EC and their member States recognise that the lack of affordable
pharmaceuticals is a serious problem in many developing countries and
especially for the poorest people.
RELEVANCE OF INTELLECTUAL PROPERTY

7. The EC and their member States consider that intellectual property
rights provide an essential stimulus for creativity and innovation. These
rights need to be adequately protected in order to encourage, for example,
investment in research and development of new medicines, and particularly
those targeted at the major communicable diseases. 8. The Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS), which
emerged from the Uruguay Round negotiations has, however, sometimes been
criticised as limiting policy options in relation to public health
concerns.  In the view of the EC and their member States, the Agreement's
objectives, principles and purpose (set out in Articles 7 and 8), special
transitional arrangements and other provisions give these countries a
sufficiently wide margin of discretion in implementing it.  This margin
enables them to set up an intellectual property regime that meets their
policy needs and is capable of responding to public health concerns.  The
EC and their member States have declared their willingness - most notably
in the Programme for Action - to promote discussions, within the WTO, WIPO
and WHO, to address the link between the Agreement and public health
protection issues.
This Communication summarises the views of the EC and their member States
on some of the relevant provisions of the Agreement. COMPULSORY LICENSING

9. In a number of areas, the TRIPS Agreement can be seen as allowing
Members a certain degree of discretion in the manner in which they
implement it.  Compulsory licensing (or 'other use without the
authorisation of the right holder') is one such area.
10.        Since Article 31 of the Agreement does not specify the
grounds on which compulsory licences may be granted, a number of reasons,
inter alia those of public health, may legitimately be cited.
 The Article simply lays down certain procedural safeguards which have to
be respected on those occasions when such licences are issued: for example,
it is required that a voluntary licence be requested before a compulsory
one is issued, and that the patent-holder be paid adequate remuneration.
It is important to note, though, that the requirement to first try and
obtain a voluntary licence can be waived in the following cases:  i) in a
national emergency, or other circumstances of extreme urgency;  ii) where
the subject matter of the patent is required for public non-commercial use.

11.        However, some have claimed that Article 31 is hedged around
with too many procedural restrictions for it to be of use to developing
countries who might wish to resort to compulsory licensing in order to
obtain access to patented medicines at affordable prices. The EC and their
member States consider that procedural safeguards are important to
guarantee legal security.  Article 31 nevertheless leaves some flexibility
in cases of national emergency and other circumstances of extreme urgency,
or when the subject matter of the patent is required for public
non-commercial use.  Although Article 31 does not itself contain
tailor-made solutions to any specific problem raised in the debate on
access to health, it does leave WTO Members the freedom to determine the
grounds for granting compulsory licences, provided the terms of the
Article, and of other provisions of the Agreement, are met, and it allows
for swift action in case of emergency or extreme urgency.

12.        The lack of any explicit reference to public health is said
to make countries wary of using the Article for fear of provoking expensive
litigation.  This has led to calls for a declaration, or perhaps a
recommendation to the General Council, to clarify what phrases such as
'national emergency' and 'public non-commercial use' can be interpreted as
referring to.  As for the level of HIV/AIDS infection reported in some
developing countries, there would appear to be very good reasons for
describing it as a 'national emergency' or as a 'circumstance of extreme
urgency'.
The view of the EC and their member States is that the absence of any
explicit reference to public health in Article 31 does not prevent WTO
Members from invoking public health concerns.  Article 7 ('Objectives')
refers to 'social and economic welfare' as an objective of the Agreement
while Article 8 ('Principles') allows Members to take measures necessary to
protect public health, provided such measures are consistent with the
provisions of the Agreement.  Although Articles 7 and 8 were not drafted as
general exception clauses, they are important for interpreting other
provisions of the Agreement, including where measures are taken by Members
to meet health objectives.

13.        Article 31 has been further criticised for requiring that
goods manufactured under a compulsory licence be 'predominantly for the
supply of the domestic market of the Member authorising such use.' This
provision is sometimes said to prevent a small country that has no
production facilities of its own from obtaining cheap medicines from abroad
under a compulsory licence.  This is an important argument as the Agreement
does not appear to offer any legal certainty on the issue.  What can be
said is that a WTO Member is free to grant a compulsory licence for the
importation of goods which are under patent in its own territory, as long
as the imported goods have been produced in a country where they are not
patented, or where the term of protection has expired.  However, the EC and
their member States also point to another possible interpretation of the
Agreement (see DG Trade website
http://www.cc.cec:8082/comm/trade/pdf/med_lic.pdf) that would allow a
Member to issue a compulsory licence to a manufacturer in another country,
provided the government of that other country recognised the licence (which
it would not be obliged to do under the Agreement), and provided that all
the goods manufactured under the licence were exported to the country
granting the licence.  It should be noted, however, that it is far from
certain whether such a 'permissive' reading of the Agreement would stand
scrutiny by a panel or the Appellate Body.
The EC and their member States are ready to discuss this matter in order to
reach consensus on this issue among all WTO Members.



EXCEPTIONS TO PATENT RIGHTS

14.        Article 30 of the TRIPS Agreement ("Exceptions to Rights
Conferred") also leaves a certain degree of discretion to WTO Members as
regards its implementation.  It allows for limited exceptions to the
exclusive rights conferred by a patent, provided they are:  1) limited;  2)
not unreasonable;  and  3) do not prejudice the legitimate interests of the
patent holder or of third parties. The EC and their member States consider
that Article 30 amounts to a recognition that the patent rights contained
in Article 28 ('Rights Conferred') may need to be adjusted in certain
circumstances.  The provisions of Article 30 should be fully respected, and
be read in the light of Articles 7 and 8 (referred to above).  They should
not be interpreted as allowing for any substantial or unjustified
curtailment of patent rights.  However, the EC and their member States are
not opposed in principle to exceptions being made, for example, for
purposes of research, provided of course that such exceptions are
non-discriminatory.
PROTECTION OF UNDISCLOSED INFORMATION

15.        Further clarification of Article 39.3 could also be useful
in the context of the debate on access to drugs.  This provision obliges
WTO Members to protect undisclosed test or other data against unfair
commercial use, when those WTO Members require submission of such data, the
origination of which involves considerable efforts, as a condition of
approving the marketing of pharmaceutical products. Indeed, a new medicine
normally has to go through a series of safety tests before it is granted
marketing approval.  The question then arises as to whether the resulting
test data can be relied on by the regulatory authority years later when
reviewing an application for marketing approval for a generic version of
the medicine, thus avoiding the need for the applicant to submit new data
and speeding up commercialisation of the generic medicine in, for example,
developing countries.
The view taken by the EC and their member States is that the Agreement does
contain an obligation to protect test data against 'unfair commercial use',
and that the most effective method of doing so is to deny the regulatory
authorities the possibility of relying on such data for a reasonable period
of time.  Furthermore, data protection should be available whether or not
the product subject to regulatory approval is protected by patent or not,
since data protection is quite a different issue from patent protection.

16.        Concern has been expressed in some quarters that such an
interpretation could render compulsory licensing ineffective, because it
would oblige the licensee to produce its own test data in order to obtain a
separate marketing approval, thereby delaying the arrival of the goods on
the market.
The EC and their member States consider, though, that Article 39.3 neither
obliges Members to have marketing approval procedures, nor does it
prescribe what those procedures should be.  The provision
should certainly not be interpreted in such a way as to weaken or nullify
Members' rights under other Articles of the Agreement, such as the 'fast
track' procedure in case of emergency  foreseen under Article 31(b), which
is a recognition of the need, in certain circumstances, for compulsory
licences to be given immediate effect.




CONCLUSION

17.        The TRIPS Agreement represents a delicate balance between
the interests of right-holders and consumers.  The EC and their member
States stand ready to contribute constructively to any debate concerning
the interpretation of its provisions.
18.        Moreover, the spiralling health crisis in the developing
world has underlined the need for rapid action.  The TRIPS Agreement has
increasingly come under fire for allegedly standing in the way of
developing countries' efforts to implement an effective public health
policy.  The EC and their member States take such criticisms seriously and
stand ready to engage in a positive manner in the discussion, leading where
necessary to clarification, of certain of the Agreement's provisions.  This
paper has focussed on Articles 7, 8, 30, 31 and 39, but Members may wish to
discuss other provisions they consider to be relevant.  The EC and their
member States are also ready to discuss to what extent technical assistance
can take into account health concerns.
19.        Improving health at the same time as combating poverty
requires a mix of complementary social, economic and health policies and
practices.  Health gains largely depend on using available resources in
productive and efficient ways, as shown by the great strides made by some
middle and low-income countries.  Intellectual property rights play a role
with regard to access to medicines. However, the TRIPS Agreement cannot be
held responsible for the health crisis in developing countries, while it
must not stand in the way for action to combat the crisis.  The EC and
their member States will continue to constructively and positively take
part in the expanding global effort to develop a coherent and effective
response to the health problems of the developing world.

__________


_______________________________________________
Ip-health mailing list
Ip-health@lists.essential.org
http://lists.essential.org/mailman/listinfo/ip-health