27 September 2000
Dear Commissioner Lamy and Commissioner Nielson,
On behalf of the following organizations, we would like to express our views on the consultations regarding European Union trade policy and access to medicines in developing countries. In particular, this letter will address several specific points that have been discussed in the consultations, relating to intellectual property matters.
We will preface these comments by first agreeing with all those who correctly point out that the issues of access to medicines are complex, and involve many issues other than intellectual property issues. For example, everyone is in agreement that issues concerning medical infrastructure, funding for health care, cultural attitudes and education are of course very important issues that should be addressed. However, we do not agree with those who suggest that intellectual property concerns are not important. Policies and practices on intellectual property protection have huge influences on the prices of many medicines, and the pricing of medicines is an important and indeed critical issue for millions of persons who currently suffer from a lack of access to medicines. We cannot accept a trade policy that ignores this reality.
With respect to intellectual property concerns, we are asking the European Union to address several issues, some of them quite technical, that have important consequences regarding the pricing of medicines in development countries.
1. It is morally repugnant for the European Union to oppose production of medicines for export markets.
The large brand name pharmaceutical companies have made it clear that they are hesitant to provide deeply discounted priced drugs to the poor in developing countries, and that concessions in this area will be limited in terms of price discounts, selection of products and the restrictions on the availability of medicines. In those case where branded companies will not provide affordable drugs, the only alternative sources are from generic manufacturers.
There are non-trivial economies of scale in terms of manufacturing drugs. Most African, Latin American and Asian countries are do not have a large enough domestic market to justify national production of all of the needed products, and even those that do have large domestic markets may lack the know how and facilities to do so for particular products.
It is very important for countries to obtain medicines by imports, if they are going to be able to get the best prices and the best quality drugs.
The European Union is itself seeking to benefit from the free movement of goods, and economies of scale.
Under Article 31 of the WTO TRIPS accord, compulsory licenses for medicines may be issued for a variety of purposes. Article 31.f of the TRIPS normally limits the compulsory license so that use shall be authorized predominantly for the supply of the domestic market." However, under Article 31.k, countries are not obliged to apply the restrictions in (f), where such use is permitted to remedy a practice determined . . . to be anti-competitive." In fact, many compulsory licenses in the United States and in Europe are issued pursuant to Article 31.k, and subject to export. Also, according to WTO and WIPO official, a country could waive certain Article 28 patent rights, under the general Article 30 exception clause, if the WTO determined that such a waiver was reasonable. For example, the WTO could decide that the exception was reasonable in cases where the production was for export to markets where the product was sold under a TRIPS compliant compulsory license.
When the European Commission was asked by the Trans Atlantic Consumer Dialogue to address the issue of complusory licenses on the BRAC1 and BRAC2 breast cancer screening patents, to address public health concerns of European consumers, the Commission wrote:
2.1. Limitations on patent rights.
A patent is essentially a contract between the inventor and the state. In return for fully disclosing his invention to the public, the inventor is provided with a limited monopoly. This monopoly, which typically extends for a maximum of 20 years, provides the inventor with the right to prevent others from making or using his invention. It does not provide a positive right of use. The use of the invention will remain subject to other laws including those for example to protect fundamental human rights.
The information disclosed by patent applications provides an extremely useful source of technical information for those seeking to design around or further develop patented inventions. To enable them to do these things, patent laws generally contain exceptions to patent infringement covering basic non-commercial research and also experimental use of the patented invention.
Patent laws also include safeguards such as compulsory licensing to prevent the abuse of patent rights. Such abuse could comprise for example failing to provide the market on reasonable terms, or the denial of licences to another patent holder who is dependant on that licence to exploit his invention.
Clearly there is an abuse of patent rights if an invention is priced so high that it endangers the public health, and clearly developing countries have a moral right and indeed a public duty to take steps to ensure that their public has access to medicines.
If the European Government opposes the use of patent exceptions for production for export, it will make it much more difficult for developing countries to obtain inexpensive medicines, even under a compulsory license. At the present time this is not an impossible problem, because there are many products off patent in India, Brazil, Thailand and other countries, that could be sources for imported products. But this will change over time as the TRIPS is implemented, and even today it is a problem because developing countries cannot purchase many products from high quality manufacturers in Europe, the United States, Israel, Japan and elsewhere.
2. The European Union should not seek to place unreasonable restrictions on the use of test data for drug approvals.
The big branded companies are seeking a very aggressive interpretation of Article 39.3 of the TRIPS accord, with respect to the unfair commercial use of test data used for drug approvals. The EU rule in this regard is currently restricted to only some regulatory uses, and was adopted primarily to compensate for a lack of patent protection on pharmaceuticals in Spain and Portugal, a condition that has since been remedied.
There is a WTO dispute now involving Article 39.3 and Argentina, and the EU's role in the dispute will be important. The EU should not insist on restrictive interpretations of this clause in the TRIPS, or more generally in its bilateral trade negotiations.
A restrictive interpretation of Article 39.3 would frustrate efforts at compulsory licensing of patents, because even if a patent was licensed, exclusive rights to the data would be a barrier to market entry. At a very minimum, the EU should recognize the need to have a form of compulsory licensing of test data, in cases where this is appropriate or needed.
3. The European Union should support the creation of a working group on access to medicines in the WTO.
The two points above illustrate only a few of several technical areas where the WTO will have to make important judgements in terms of the TRIPS. The WTO is also engaged in ongoing reviews of the TRIPS. We welcome the current WHO efforts to monitor trade policies, but this is not a substitute for a WTO working group on access to medicines. It should be noted that the WTO has the real power in trade negotiations, and that it has a responsibility to protect the public health in its policies. In the Seattle WTO meeting, the European Union offered a poorly conceived proposal on compulsory licensing of the WHO essential medicines list that was ultimately withdrawn because of opposition from public health groups. The confusion over this issue illustrated the gap between trade officials and public health groups, and a WTO working group on access to medicines would begin to bridge that gap.
The Working Group on Access to Medicines has been endorsed by the Trans Atlantic Consumer Dialogue (TACD), MSF, Health Action International, Act Up, the Consumer Project on Technology and a number of other NGOs working on the access to medicines campaign. The failure of the European Union to support the creation of such a working group is evidence that despite the public relations efforts, there is still no real effort to change policy in order to support better access to medicines.
Sincerely, Genon Jensen European Public Health Alliance p.p.Bas van der Heide Health Action International, European region p.p. Jamie Love Consumer Project on Technology p.p. Mohga Kamal Smith Oxfam UK p.p. Jaap Kemkes Wemos Foundation p.p. GaŽlle Krikorian Act Up-Paris Cc Paul Vandoren (DG Trade, Unit New technologies, intellectual property, public procurement)