Bridges Weekly Trade News Digest • Volume 7 • Number 24 • 3rd July 2003
US Rumoured To Consider Change In Tactic On Trips & Health
According to trade sources, the US is considering changing its approach to the discussions on paragraph 6 of the Declaration on the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs) and public health, shifting its focus from disease coverage to eligibility. This change reflects the position of US pharmaceutical industries, which have reportedly called on the US government to limit the use of the paragraph 6 solution to the world’s poorest countries and to implement strong measures that prevent diversion of cheap drugs to developed country markets.
According to paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health, the TRIPs Council must find an expeditious solution by the end of 2002 to the problems countries may face in making use of compulsory licensing (i.e. the practice by a government to authorise itself or third parties to use the subject matter of a patent without the authorisation of the right holder for reasons of public policy) if they have insufficient or no pharmaceutical manufacturing capacity. The perceived need to address this issue arose from concerns related to Art. 31(f) of the TRIPs Agreement, which requires that production under compulsory licensing must be primarily for the supply of the domestic market.
In a letter to the US government, 22 US and European pharmaceutical companies and three trade associations noted that the number of countries eligible to take advantage of the paragraph 6 solution should be limited, based on criteria such as a country’s gross national product or whether a certain percentage of the country’s population is affected by a disease. Eligible countries would include least-developed countries and some low-income developing countries, but would likely exclude mid-level income countries such as Malaysia and the Philippines, both of which constitute potential markets for the pharmaceutical companies.
The letter also stressed the need for strong safeguards that would prevent the diversion of cheap medicines to developed country markets. Such safeguards could include mandatory special packaging for products traded under the mechanism. A 16 December 2002 draft text — which all countries, with the exception of the US, were able to agree on — put forward by former TRIPs Council Chair Ambassador Perez Motta currently only calls for the use of special packaging and/or special colouring or shaping of products "provided that such distinction is feasible or does not have a significant impact on price".
The suggestion to limit the number of eligible countries, or differentiate between developing countries, is not new and has in the past been strongly opposed by economies in transition and high-income developing countries. These have objected to the inclusion of any categories of countries that are not officially recognised by the WTO (see BRIDGES Weekly, 20 December 2002). However, the US’ rejection of Motta’s draft text has so far focused exclusively on disease coverage, which the US was seeking to limit to HIV/AIDS, malaria, tuberculosis and similar infectious diseases. Developing countries say the TRIPs and Public Health Declaration refers to "public health problems," and therefore should not be limited in the scope of its disease application. It remained unclear whether the US would drop its demand for limiting the disease coverage of the solution or whether they would propose changes to the 16 December draft decision. Developing countries have repeatedly stressed that they would only be willing to accept the draft in its current form and that once the text was re-opened on disease coverage or eligibility, they would also demand changes to other parts of the draft.
The 16 December draft solution is available at http://www.ictsd.org/ministerial/cancun/docs/TRIPs_para6_16-12-02.pdf.
ICTSD reporting.