[Random-bits] Doha + Five: The Doha Declaration on the TRIPS Agreement and Public Health, after five years

[James Love]

http://www.cptech.org/ip/health/wto/dohaplus5.html

Doha + Five: The Doha Declaration on the TRIPS Agreement and Public
Health, after five years

Consumer Project on Technology*
November 14, 2006

I. The 2001 Doha negotiation

The World Trade Organization (WTO) adopted the Doha Declaration on
the TRIPS Agreement and Public Health on November 14, 2001.

It most importantly stated, =93the TRIPS Agreement =85. 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.1

The Declaration was relatively short -- 553 words for the English
version, split into seven paragraphs. It was both a political
statement, supporting access to medicine for all, and a decision that
addressed substantive issues in furtherance of that goal. The
specifics were at the end of the Declaration.

Paragraph 5 set out "clarifications" regarding the flexibilities of
the TRIPS in the areas of compulsory licensing and parallel trade,
eliminating doubts about the freedom of countries to choose the
grounds for compulsory licenses. The compulsory licensing fast-tract
procedures for emergencies were plainly extended to include cases
involving short or long term public health crisis. The WTO would only
regulate parallel trade in the area of most favoured nation (MFN)
status, or national treatment.

Paragraph 6, the weakest part of the Declaration, called upon the
WTO's Council for TRIPS to find an expeditious "solution" to the
problems facing countries with "insufficient or no manufacturing
capacities in the pharmaceutical sector," when seeking to make
effective use of compulsory licensing under TRIPS Agreement. This
issue, which was often poorly understood and reported, would later
become the subject of prolonged and sometimes treacherous
negotiations, which in the end, provided a controversial and
disappointing outcome.

Paragraph 7 of the Declaration gave least developing countries the
right to eliminate pharmaceutical product patents or protections of
pharmaceutical test data at least until 2016.

By singling out public health, and in particular pharmaceuticals,
from other trade related issues, the Doha Declaration recognized that
medicines are not just another commodity and may be differentiated
from other inventions in order to protect public health, regardless
of language in Article 27 of the TRIPS, regarding discrimination by
field of technology.

II. Negotiations on paragraph 6 of the Doha Declaration

The negotiation over the implementation of paragraph 6 of the Doha
Declaration was a major test for the WTO, that it largely failed. As
noted by many experts, the WTO decision of 30 August 2003 was
protectionist (it allows countries to participate as exporters, while
blocking imports), complex, and poorly designed to exploit economies
of scale and other efficiencies. It could have been worst. In 2002,
the WTO considered limiting the decision to only a handful of
diseases -- an irrational and morally repugnant result.

The 2005 WTO decision implementing the 2003 Decision and permanently
amending the TRIPS Agreement was more than 2,300 words, including
1,616 words for a new article 31bis for the TRIPS. It is further
marred by a restrictive 2003 Chairman's statement of 976 words.

A much shorter and simpler outcome was possible. For example, on
October 23, 2002, the European Parliament adopted Amendment 196, in
an effort to update the EU Directive 2001/83/EC relating to medicinal
products for human use. This Amendment sought to address the
paragraph 6 solution in only 51 words:2

-------begin quote
"Manufacturing shall be allowed if the medicinal product is intended
for export to a third country that has issued a compulsory license
for that product, or where a patent is not in force and if there is a
request to that effect of the competent public health authorities of
that country."
-------end quote

The shorter solution was rejected by DG-Trade and USTR for the simple
reason that it would have worked. While DG-Trade and USTR had
endlessly advertised to an uncritical press that they were seeking to
help the poor, this was clearly not the case.

Some of the flaws in the TRIPS amendment should be highlighted. The
fact that it bars imports to nearly all high income countries is
absurd, given the fact that these countries have already faced a
potential crisis of inadequate capacity to manufacture medicines
needed for public health emergencies twice since 2001 -- once for
possible treatments for biochemical attacks, and again for treatments
for a possible bird flu pandemic. The protectionist nature of the
"solution" of paragraph 6 was designed to ensure that Indian generic
suppliers could not export medicines to high-income countries under
this mechanism -- a result that undermines economies of scale for
developing country (but not high income country)=92s producers, and
ultimately makes consumers in both high and low income countries
worst off.

That said, the WTO's amendment to the TRIPS Agreement did create some
new space for permitting exports of medicines, when manufactured
under a compulsory license.

III. National Implementation of paragraph 6 of the Doha Declaration

The response by WTO members to implement this new flexibility has
been quite uneven. Among the worst approaches to implementing the new
mechanism are those found in Canada and the European Union. Often
overlooked, but certainly the best implementation, is the mandatory
compulsory licensing for export approach adopted by India, in
February 2005.3

It is ultimately too early to judge the utility of the new Article
31bis of the TRIPS Agreement. The reason that there have been few
efforts to use the provision is obvious. Few important medicines are
now patented in India. As a consequence, importers have not had to
rely upon the new paragraph 6 mechanisms -- yet. Over time, paragraph
6 may or may not become more important, depending upon the
willingness of countries to issue import licenses, and the extend to
which exporting countries rely upon other exporting mechanisms, such
as Articles 6, 30, 31.k and 40 of the TRIPS Agreement, Paragraph 7 of
the Doha Declaration, or the ability of countries without relevant
patents (including non-WTO members) to ramp up export capacity.

As India=92s implementation has show, those countries that use the new
paragraph 6 mechanisms to promote exports can make it nearly
automatic, if they want to. Poor implementation of Article 31bis is
not entirely the fault of the WTO.

For non-LDC WTO members, the leading alternative to Article 31bis,
are compulsory licenses that use TRIPS Articles 31.k and 40. The use
of TRIPS provisions on remedies to anticompetitive practices, which
can include simple refusals to license, are objectively much better
mechanisms for authorizing exports -- a fact often overlooked by
technical assistance experts.

IV. National Implementation of paragraph 7 of the Doha Declaration

One of the largest disappointments has been the failure of LDCs or
technical assistance agencies, like the WTO, WIPO or WHO, to promote
implementation of paragraph 7 of the Doha Declaration. The major
benefit of this provision so far has been the decisions by donors,
such as the Global Fund, to effectively ignore patents in LDCs, or to
accept compulsory licenses issued under questionable procedures. This
solution is unsatisfactory in the long run, however.

V. National Implementation of paragraph 4 of the Doha Declaration

Since 2001, a number of developing countries have issued compulsory
licenses on patents for a handful of AIDS drugs. These include South
Africa (2003, as remedy to anticompetitive practices), Zambia,
Zimbabwe, Ghana, Malaysia, Indonesia, and Swaziland, to name only
some examples. However, countries still struggle with compulsory
licensing, for a variety of reasons, including lack of experience,
uncertainly over procedures and remuneration, bad national laws,
fears of backlashes from investors or trading partners, or corruption.

National laws still often fail to fully exploit the flexibilities of
the TRIPS Agreement. None of the UN agencies dealing with technical
assistance have provided optimal models for statutes on compulsory
licensing in lower income countries. The WHO is woefully under-
resourced for providing technical assistance, and in several cases
has pressured its own staff when they have attempted to provide
public health perspectives on intellectual property right issues,
leading to speculation that large pharmaceutical companies exercise
undue influence at the WHO.

VI.New paradigms for implementation of paragraph 4 of the Doha
Declaration

National governments, UN agencies, development experts, donors,
health activists and others need to consider new mechanisms for
collective management of intellectual property rights, such as
regional or global pools for patents on essential medicines. These
patent pools can help countries address many of the problems
associated with compulsory licensing. For example, patent pools can:

    1. reduce transaction costs and develop the capacity to deal with
legal, management and administrative issues associated with voluntary
and non-voluntary licensing of patents,
    2. provide for greater economies of scale for generic suppliers,
    3. protect countries from political pressures, as the pool
creates regional or global norms for licensing, and
    4. insure that compulsory licensing will follow best practice
models on issues such as remuneration, transparency, competition
(open licensing), and drug quality (licensing only to qualified
suppliers).

Additional attention should be given to the proposals for new
paradigms to support medical R&D, including for example the medical
innovation prize fund approach (such as United States proposed bill
H.R 417 from the 109th Congress), or related systems to reward
positive health care outcomes for development of products that treat
Type II or III diseases, and global R&D treaties -- ideas that will
be will be considered by the new WHO intergovernmental working group
(IGWG), which first organizes on December 4-8, 2006.

Ultimately the most important paradigm shift will be to break the
link between medical R&D and drug prices. Only then can the promise
of the 2001 Doha Declaration reach its potential.

-------------------
Footnotes:

1 WT/MIN(01)/DEC/2, Declaration on the TRIPS agreement and public
health, 20 November 2001, Paragraph 4.

2 See 2002 Civil Society letter to Commissioner Lamy and Ambassador
Zoellick on the European position: http://www.tacd.org/cgi-bin/db.cgi?
config=3Dadmin/docs.cfg&id=3D178

3 Insertion of new section 92A to the Indian Patent Law - Compulsory
licence for export of patented pharmaceutical products in certain
exceptional circumstances. "After section 92 of the principal Act,
the following section shall be inserted, namely:=97 92A. (1) Compulsory
licence shall be available for manufacture and export of patented
pharmaceutical products to any country having insufficient or no
manufacturing capacity in the pharmaceutical sector for the concerned
product to address public health problems, provided compulsory
licence has been granted by such country or such country has, by
notification or otherwise, allowed importation of the patented
pharmaceutical products from India. (2) The Controller shall, on
receipt of an application in the prescribed manner, grant a
compulsory licence solely for manufacture and export of the concerned
pharmaceutical product to such country under such terms and
conditions as may be specified and published by him. (3) The
provisions of sub-sections (1) and (2) shall be without prejudice to
the extent to which pharmaceutical products produced under a
compulsory licence can be exported under any other provision of this
Act. Explanation.=97For the purposes of this section, "pharmaceutical
products" means any patented product, or product manufactured through
a patented process, of the pharmaceutical sector needed to address
public health problems and shall be inclusive of ingredients
necessary for their manufacture and diagnostic kits required for
their use."

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---------------------------------
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