Efficacy of TRIPS public health amendment raises concern at the WTO

Nirav Bhatt is an LLM candidate at Osgoode Hall Law School.

WTO members on 2 March 2010, debated the question of whether a 2003 decision designed to improve access to medicines is working. Although opinions expressed in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council varied, members agreed that they should look at real-life experiences in order to assess the system.

IP watch reported that at an earlier 12th February informal meeting, several members – including Brazil, China, Cuba, Ecuador, Egypt, India, Indonesia and Venezuela – said that the so-called “paragraph 6” amendment is not working effectively. Paragraph 6 refers to the 2001 WTO Doha Declaration on TRIPS and Public Health, which mandated that WTO members solve the problem of medicines access for countries lacking domestic drug production capabilities. Therefore to address the problems faced by countries with insufficient or no manufacturing capacity in the pharmaceutical sector – the 30 August 2003 decision of the general council was adopted which later converted into an amendment of the TRIPS agreement on 6 December 2005.

This amendment has been used only one time, when Canadian drug firm Apotex sent two shipments of AIDS medicines to Rwanda under Canada’s Access to Medicines Regime (CAMR). The effort was led by the Canadian company, which has said it does not plan to repeat the complicated process. Key dates given by Canada, as reported by IP watch, included: May 2005, when domestic regulation to allow for export-oriented compulsory licences (passed by the Canadian Parliament a year before) went into effect; December 2005, when Apotex applied to use the system; June 2006 when Apotex’s application was approved; and July 2007 when Rwanda was identified as Apotex’s customer.  There is a procedural step required by TRIPS in which the patent holders must be contacted to see if they will provide a voluntary licence. After this failed to produce a licence, Apotex applied for a compulsory licence in September 2007, which was then granted in October 2007. The company then had to undergo a review from Rwanda to obtain public tender. After this was granted in May 2008, the drugs were manufactured for a first delivery date in September 2008, nearly 3 years after Apotex applied to use system.

However, compulsory licensing as a policy mechanism can be used to address a number of situations in the context of public health including high prices of medicines, anti competitive practices by pharmaceutical companies, failure by pharmaceutical patent holders to sufficiently supply the market with needed medicines, emergency health situations and the needs for establishing a pharmaceutical base. Compulsory licensing is important for improving access to essential medicines as well as facilitating the development of innovative capacities and Research and Development especially in developing countries. For example, a local working requirement, which is a ground for the issue of such licences, can be important both for improving access to essential medicines as well as facilitating the technology transfer obligations envisioned in Article 66 of the TRIPS agreement. Further, the countries in need of cheaper versions of patented pharmaceuticals may increasingly face a situation in which they lack the industrial capacity to produce them, while the foreign supplies are unavailable. Due to lack of technical capacity, adequate equipment, human resources, high costs of production, or other obstacles, many developing countries and the LDCs cannot produce the active ingredients needed to manufacture pharmaceutical products. In these circumstances, compulsory licensing is an alternate solution.

The costly prices of medicines should not curtail every human being’s right to good health and for this reason this right is recognized in certain forms as a fundamental right, both under public international law and the domestic law of many civilized nations.  It is critical that developed countries realize this and therefore create further room for broader interpretation of compulsory licensing. When considering the question of enabling countries lacking manufacturing capacity in pharmaceuticals to make effective use of compulsory licensing, one consideration is enabling the production of generic medicines on larger scale in a simpler fashion.