International Trade Daily
Wednesday, October 24, 2001
WTO Talks on TRIPS, Public Health
Declaration Stall Over Compromise Text
GENEVA--Efforts by members of the World Trade Organization to forge
ministerial declaration on intellectual property and public health
stalled after the United States and Switzerland voiced objections to
draft text which they said could undermine the WTO's Agreement on
Trade-Related Aspects of Intellectual Property Rights.
Informal discussions on a first draft declaration circulated by WTO
Council chairman Stuart Harbinson Oct. 21 revealed continued sharp
differences between developed and developing countries as to whether
needs to be reinterpreted or clarified in order to give governments
flexibility under the WTO agreement to address public health crises such
the HIV/AIDS crisis pandemic.
Some officials described the TRIPS/public health debate as one of the
important and difficult issues facing Geneva negotiators as they
for the WTO's fourth ministerial conference in Doha, Qatar on Nov.
where the declaration will be submitted for approval.
"The situation now is not so good," said one official closely
the talks. "Right now, we're at an impasse."
"The situation is very difficult," added Federico Cuello
Dominican Republic's ambassador to the WTO. "There's strong
two countries, with the tacit support of a few other countries."
Cuello said the ongoing anthrax scare highlighted the need for
flexibility on the interpretation of TRIPS rules.
The Canadian government announced Oct. 18 it would ignore the patent
by Bayer AG on Cipro, the anthrax treatment, and order generic versions
ensure an adequate supply of the medicine. Ottawa later changed its
and said it would continue to rely on Bayer for the supply of Cipro
only resort to generics if the company could not meet demand for=20
In the United States, Sen. Charles Schumer (D-New York) called on
government Oct. 16 to allow the generic production of Cipro in order
ensure adequate supply. But Health and Human Services Secretary Tommy
Thompson announced Oct. 22 that his department has no current plans
override Bayer's patent on Cipro at this time.
"We only want to do what the United States is already doing, and
Canada is already doing," Cuello declared.
Conscious of Anthrax
"It's not there in the (WTO) discussions," said a Brazilian
reference to the anthrax scare and its impact on the TRIPS/public
debate. "But everyone is conscious of it. It adds a lot of weight to
The Harbinson text aims to bridge the differences between=20
countries led by Brazil, India and South Africa, and countries such as
United States and Switzerland which are home to major global
The former camp wants a declaration that would make it easier for
countries to overcome intellectual property barriers that may
affordable access to HIV/AIDS treatments and essential medicines,
a broader interpretation of TRIPS rules regarding parallel=20
(importing a patented drug from another country where it is sold
and the use of compulsory licenses (allowing the production of a
good without the permission of the patent right holder).
The demand for a declaration emerged from the public outcry over
proceedings initiated in South Africa by 39 drug firms who sued the
government there over a law allowing patented medicine sold cheaper
to be imported into South Africa without the right holder's permission
suit was later dropped) as well as a U.S. complaint filed with the
against Brazilian patent legislation which Brazil claimed would
its policy of offering cheap medicines to those infected with the
virus (the proceedings were also suspended).
Opposition From U.S., Switzerland
The United States and Switzerland oppose a declaration on the grounds
patents are not a barrier preventing access to essential medicines. The
countries however say they are willing to go along with a statement
affirming that TRIPS already contains provisions giving governments
flexibility to ensure access to medicines needed to tackle HIV/AIDS
Highlighting the sharp differences on the issue, the Harbinson text
several key elements of the draft declaration in brackets. Even the
of the declaration was left in brackets as members feuded whether the
should be on access to medicines or public health in general.
Most of the discussion focused on the fourth paragraph of the
text, which reads as follows: "We emphasize that the TRIPS
permits governments to take measures to [protect public health][to
access to medicines at affordable prices]. In this connection, we
the right of WTO Members to use, to the full, the provisions in the
Agreement which provides flexibility for this purpose, as an integral
of our commitment to the TRIPS Agreement as a whole."
In informal discussions which took place between Oct. 21-23, the
States and Switzerland warned that the emphasis of the declaration
be on access to affordable medicines and that any attempt to extend
language to public health in general could be used to justify broad
exemptions from TRIPS rules beyond what is needed to address health
Trade officials involved in the talks said that the Swiss attempted to
forward compromise language reaffirming the commitment of members to
TRIPS accord while stating the right to use all provisions under=20
agreement to protect public health, but the text was refused by the
States. Developing countries also said the text did not make sense
it seemed to suggest that the full provisions of TRIPS could not be
outside the context of public health.
The EU's ambassador to the WTO Carlo Trojan also put forward
language stating that nothing in TRIPS shall be interpreted in a way
prevents WTO members from pursuing and addressing public health
the officials said. But Trojan later withdrew the proposal without
The European Commission has come under criticism from some of its
states and its pharmaceutical industry for taking a position in the
TRIPS/public health debate without first seeking guidance from
states. The Commission has staked out a middle position, arguing that
offers enough flexibility allowing governments to pursue their
health objectives but adding it is prepared to discuss possible
"clarifications" of certain provisions under the agreement.
Critics in the pharmaceutical industry charge that the Commission is
to curry favor with developing countries in order to win their support
issues such as the environment, investment and competition, and
of geographical indications for foods which the EU wants to put on
agenda of a new trade round that the WTO hopes to launch in Doha.
The United States has shown some flexibility on other issues covered in
TRIPS/public health debate, including longer transition periods for
countries to ensure compliance with their TRIPS obligations and a
moratorium on WTO dispute settlement proceedings involving allegations
Trade officials said the United States has proposed allowing longer
transition periods for WTO members classified as least developed
to bring their laws in line with TRIPS requirements and imposing a
moratorium on WTO settlement of TRIPS disputes involving=20
African countries and measures taken by them to address the AIDS
But developing country critics say the former proposal is meaningless
practice as Article 66.1 of TRIPS gives these countries an automatic
to seek longer transition periods as long as their request is
motivated." Least developed countries in any case have until Jan. 1,
to ensure compliance with TRIPS.
By Daniel Pruzin
Copyright =A9 2001 by The Bureau of National Affairs, Inc., Washington
International Trade Daily
Wednesday, October 24, 2001
WTO Should Address Tariff Issues,
Not Patents, Pharmaceutical Group Says
The World Trade Organization should address factors that restrict
developing countries' access to critical medicines, such as high tariffs
pharmaceuticals, rather than focusing on patents and intellectual
rights, the Pharmaceutical Research and Manufacturers of America
said Oct. 23.
Shannon Herzfeld, senior vice president international for PhRMA,
reporters at a briefing sponsored by the pharmaceutical lobbying group
patents "aren't the problem" for developing countries seeking
HIV/AIDS and other medicines.
Instead, she cited corruption and flawed government procurement
in addition to tariffs, as barriers the WTO could help eliminate.
problems resulting from underdeveloped health care systems and a lack
resources were also significant factors, she said.
The WTO is discussing the effect of its Trade-Related Aspects of
Intellectual Property Rights (TRIPs) agreement on developing
ability to promote public health. The issue has emerged as a major bone
contention in negotiations to launch a new round of trade talks under
auspices of the WTO.
Negotiations continued in Geneva Oct. 21-23 on a draft ministerial
declaration on intellectual property rights (IPR) and public health.
draft text, separate from the overall ministerial declaration that is
currently being negotiated, is to be submitted for approval at the
fourth ministerial conference scheduled for Nov. 9-13 in Doha,
However, agreement over the proposed text from WTO General Council
Harbinson has proven elusive.
Herzfeld noted that PhRMA, which represents pharmaceutical companies
account for 95 percent of the brand-name drug sales in the United
was "disappointed" that TRIPs and public health were to be
addressed in a
separate declaration. She said PhRMA was concerned that removing it
the broader ministerial declaration "elevated its
'A Corruption-Free Zone'
Instead of focusing solely on TRIPs and patents, Herzfeld said, the
should discuss high pharmaceutical tariffs, bribery and corruption,
flawed government procurement processes in its next trade round. PhRMA
communicated its position to the Office of the U.S. Trade
and PhRMA's "European colleagues" have also done so with the
EU, she said.
Tariffs levied by developing countries on pharmaceutical imports
around 20 percent to 30 percent, and in India reach 65 percent,
said, which can significantly "bump up" the street price of
Meanwhile, bribery and corruption can also act as barriers to
whether due to the manufacture of counterfeit drugs, or the diversion
medicine to black markets, or bribes to government officials that raise
cost of medicines.
"Public health should be a bribery and corruption-free zone,"
said. This can be achieved partly through making it a medicinal
issue, she added.
Related to corruption is the issue of government procurement, since
national governments are major, if not the sole, purchasers of
medicines in their countries, Herzfeld noted. She said that the WTO's
on government procurement, which require greater transparency and
disciplines, are not currently applied to pharmaceuticals.
Patents Not a Barrier, JAMA Says
PhRMA also is highlighting a report from the Oct. 17 issue of the
of the American Medical Association (JAMA) that Herzfeld said showed
correlation" between access to critical medicines and a country's
laws. The report also demonstrated that most "anti-retroviral"
drugs are not subject to patents in many sub-Saharan African nations,
PhRMA fact sheet argued.
Yet "a mythology" has developed that portrays patents as a
to medicines and to improved public health in developing countries,
"I know of no instance where a patient has not received their
because of intellectual property rights," she added.
However, a coalition of consumer groups, headed by the Consumer Project
Technology (CPT), an organization founded by Ralph Nader in 1995,
the JAMA article's findings in an Oct. 16 report.
Among other things, the CPT report argues that many of the cheapest
most effective drug combinations, or "cocktails," are blocked
protections on at least one of the drugs in most of the largest
in sub-Saharan Africa.
In addition, the CPT argues that lower prices for HIV/AIDS drugs
available in Africa are "due to creditable threats of generic
countries such as India, which does not issue patents for
However, the CPT report argues that "[t]his will change"
because of the
WTO, which will require "nearly all African countries to adopt
patents on medicines."
"There is no benefit to understating the significance of changes in
rules," the CPT report says.
'The Hard Things'
However, Herzfeld argued that disputes over IPR trade rules are a
"distraction" that "diverts ... important collective
resources and energies
away from the hard task ahead of us," which she identified as
health systems in developing countries.
"To the extent that we all get a false sense of progress because
Geneva are tinkering with words on the TRIPs agreement diverts us
doing the hard things," she said.
By Chris Rugaber
Copyright =A9 2001 by The Bureau of National Affairs, Inc., Washington
Director, Policy & Research / Directeur, politiques et=20
Canadian HIV/AIDS Legal Network / R=E9seau juridique canadien=20
890 Yonge Street, Suite 700, Toronto, Canada M4W 3P4
Tel : +1 (416) 595-1666
+1 (416) 595-0094
The Canadian HIV/AIDS Legal Network is a partner organisation of=20
AIDS Law Project of South Africa. -- Le R=E9seau juridique canadien
est un organisme partenaire du AIDS Law Project de l'Afrique du
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