An amendment to the agreement on intellectual property entered into force on January 23, 2017 securing for developing countries a legal pathway to access affordable medicines under World Trade Organization (WTO) rules.
The amendment to the WTO Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement marks the first time since the organization opened its doors in 1995 that WTO accords have been amended.
The WTO Secretariat has received in recent days notifications from five members that they have ratified the protocol amending the WTO TRIPS Agreement. These notifications — from Burkina Faso, Nigeria, Liechtenstein, the United Arab Emirates and Viet Nam — brought to two-thirds the number of WTO members which have now ratified the amendment. The two-thirds threshold was needed to formally bring the amendment into the TRIPS Agreement.
Members took the decision to amend the TRIPS Agreement specifically to adapt the rules of the global trading system to the public health needs of people in poor countries. This action follows repeated calls from the multilateral system for acceptance of the amendment, most recently by the United Nations General Assembly High-Level Meeting on Ending AIDS in June 2016.
“This is an extremely important amendment. It gives legal certainty that generic medicines can be exported at reasonable prices to satisfy the needs of countries with no pharmaceutical production capacity, or those with limited capacity. By doing so, it helps the most vulnerable access the drugs that meet their needs, helping to deal with diseases such as HIV/AIDS, tuberculosis or malaria, as well as other epidemics. I am delighted that WTO members have now followed through on their commitment and brought this important measure into force,” said WTO Director-General Roberto Azevêdo. In video statements available here, some of the key players share their thoughts on the TRIPS amendment.
Unanimously adopted by WTO members in 2005, the protocol amending the TRIPS Agreement makes permanent a mechanism to ease poorer WTO members’ access to affordable generic medicines produced in other countries. The amendment empowers importing developing and least-developed countries facing public health problems and lacking the capacity to produce drugs generically to seek such medicines from third country producers under “compulsory licensing” arrangements. Normally, most medicines produced under compulsory licences can only be provided to the domestic market in the country where they are produced. This amendment allows exporting countries to grant compulsory licences to generic suppliers exclusively for the purpose of manufacturing and exporting needed medicines to countries lacking production capacity.
“As important as trade policy is, health and well-being must take precedence,” said Amina Mohamed, Kenya’s Foreign Minister who chaired the WTO General Council at the time when the amendment was approved in December 2005. “WTO members recognise this and have proven how seriously they take health issues by ratifying and putting into force an amendment to WTO rules which will facilitate access to essential medicines in low income countries.”
The amendment provides a secure and sustained legal basis for both potential exporters and importers to adopt legislation and establish the means needed to allow countries with limited or no production capacity to import affordable generics from countries where pharmaceuticals are patented. More and more WTO members are taking practical steps to implement the system in their laws. The bulk of global medicine exports is covered by laws enabling exports under this system, opening up new options for potential beneficiaries to access a wider range of potential suppliers and enabling new, innovative procurement strategies.
Background
Flexibilities such as compulsory licensing are written into the TRIPS Agreement — governments can issue compulsory licences to allow companies to make a patented product or use a patented process under licence without the consent of the patent owner, but only under certain conditions aimed at safeguarding the legitimate interests of the patent holder.
Some governments were unsure of how these flexibilities would be interpreted, and how far their right to use them would be respected. At the Doha Ministerial Conference in November 2001, WTO members struck a deal which clarified the accords and provided governments in the developing world with greater clarity and certainty that protection of patents does not and should not prevent members from taking measures to protect public health.
But one more element was needed — how to guarantee that countries lacking the capacity to produce generic drugs could still procure them affordably. Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health recognized that “WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement”, and instructed the Council for TRIPS to find an expeditious solution to this problem.
In August 2003, WTO members decided to remove an important obstacle to affordable drug imports by waiving the limitation in the TRIPS Agreement to predominantly supply the local market. The decision says that if the importing country could not secure access to needed medicines at affordable prices, these medicines could be produced under compulsory licence by drug makers in third countries, and be imported to poorer countries unable to manufacture the medicines themselves.
Two years later, WTO members agreed on 6 December 2005 to permanently incorporate the 2003 waiver decision into the TRIPS Agreement subject to the acceptance of two-thirds of WTO members. Through the entry into force of the amendment, the flexibility to protect public health becomes an integral part of the TRIPS Agreement. Against concerns some have voiced that use of this option may be challenged politically, the amendment provides legal certainty that any member can export the entirety of pharmaceutical products made under a compulsory licence to countries confronted with limited domestic capacity.
The up-to-date list and map of members that have accepted the protocol amending the TRIPS Agreement are available here. The rate of acceptance has picked up significantly in recent years, as members familiarize themselves with the practical implications of the TRIPS amendment: some 37% of instruments of acceptance were deposited in the last two years alone, following a review in the WTO General Council of the benefits of entry into force. Members who are yet to accept the TRIPS amendment currently have until end December 2017 to do so. In the meantime, they can refer to the 2003 waiver decision to access affordable medicines from third country sources.
The WTO TRIPS Council recently discussed the TRIPS public health amendment. A range of delegations urged WTO members that are yet to accept the amendment to do so expeditiously and called for work to make it operational. During related discussions on the UN High Level Panel Report on Access to Medicines, one delegation also recalled the Panel’s recommendation to revise the system of compulsory licences for export.
More information on the issue of TRIPS and public health is available here. – WTO
