Trade Negotiations Insights • Volume 8 • Number 3 • March 2009

WTO Roundup

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Fight over generic drug seizure takes centre stage at the WTO

Developing countries ramped up their criticisms of the EU, saying that its recent seizure of a shipment of generic drugs en route from India to Brazil violated trade rules on intellectual property and had significant implications for the availability of affordable medicines in poor countries. The criticisms were made at a meeting of the WTO’s Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS Council) in Geneva on 3 and 4 March.

But the most heated exchanges of the meeting concerned the drug seizure, which has been generating controversy since it first made headlines in January 2009. The tiff began in early December, when Dutch customs officials confiscated 500 kilograms of the drug losartan potassium that was docked in a port in the Netherlands while in transit to Brazil. The Dutch authorities held the shipment for 36 days before releasing it to the exporter, who sent the drugs back to India, where they had been manufactured.

At a meeting of the WTO’s General Counciin early February 2009, Brazil and India chastised the EU for confiscating the drugs, which are used to treat high blood pressure,calling the seizure unjustifiable and charginthat it had prevented Brazilian citizens from obtaining life-saving medications.

“Measures of this nature have an adverse systemic impact on legitimate trade of generic medicines, South-South commerce,national public health policies and the principle of universal access to medicines,” the Indian representative told delegates.

Brazil asserted that, far from being an exceptional case, as the EU had argued in front of the WTO’s General Council in February, incidents like the December drug seizure “occur rather frequently.”

“Not only is this a violation of the WTO disciplines, but it runs counter to the spirit of everything developing countries negotiated under TRIPS to get the flexibilities that would allow public health concerns of developing countries to be taken into consideration, to be protected,” Roberto Azevedo, the Brazilian ambassador to the WTO, said after the meeting, Reuters reported.

Several international health NGOs joined Brazil and India in censuring the EU’s actions. “In order to avoid more wrongful seizures of legal generic medicines in transit through Europe, the European Commission must immediately review and modify its regulation,” Sophie Bloeman from Health Action International said. She pointed that the EU was demanding similar IP enforcement provisions in its free trade agreements with developing countries. “This could prove to be disastrous for access to medicines in their regions,’’ Bloeman said.

But the EU, stressing that it has long been committed to helping developing countries access low-cost medicines, said that its policies are in line with international rules.

“Many countries actually should be grateful to European customs, who most likely have saved lives and certainly in developing countries, because fake medicines are more spread in developing countries than developed countries,” Luc Devigne, the top EU official at the meeting, told Reuters. Devigne added that the EU’s tight control of drug shipments was fully justified by the “significant and worrying level” of the current trade in illegal medicines.

The dispute highlights a potential rift between WTO rules and EU law. A regulation issued by the European Council in 2003 authorises customs officials “to destroy goods found to infringe an intellectual property right or dispose of them outside commercial channels” without providing compensation “of any sort.” The provision applies even if the goods in question are only in transit through EU territory.
But EU lawmakers, in a letter to the European trade and customs commissioners dated 6 March, called for the existing regulation to be amended to prevent it from “disrupting legitimate trade.” “Seizures of generic drugs within the EU are becoming an increasing widespread problem,” they added, noting that Dutch authorities had seized another shipment of medicines, this time HIV/AIDS drugs en route to Nigeria from India, at Amsterdam’s Schiphol Airport in December.

In a written response delivered last week, Lamy signalled that he would be willing to serve as a mediator in the dispute, should the countries involved ask for his help.

Moving on to the regular business of the TRIPS Council, delegates discussed a number of issues on which talks have largely stalled recently. A number of developing and least developed countries (LDCs), joined by Switzerland and the EU, emphasised the high and growing support among the WTO Membership for their proposal, presented last summer (in document TN/C/W/52), to establish geographical indications (GI) register, extend geographical indication protections, and adopt an amendment to the TRIPS Agreement to require disclosure of origin requirement.

Tanzania, speaking on behalf of the group of LDCs, and Egypt, speaking on behalf of the African group, said that they were disappointed that Members had been unwilling to introduce requirements on disclosure origin, prior informed consent, and compliance with access and benefit sharing (ABS) systems into the patent system. Developing countries have long insisted that such provisions are necessary to ensure the equitable sharing of benefits from genetic resources.

The meeting of the TRIPS Council concluded with the nomination of Karen Tan, Singapore’s ambassador to the WTO, as the new chairperson. Tan will succeed the current chair, Denis Francis, the WTO ambassador from Trinidad and Tobago.

Notes
This is a modified version of a fuller article originally published as: “Fight over Generic Drug Seizure Takes Centre Stage at TRIPS Meeting,” Bridges Weekly Trade News Digest, Volume 13, Number 9, 11 March 2009.