Communication by the European Communities to the TRIPs
Council
The implementation of the Doha Declaration
on the TRIPs Agreement and Public Health
I. Introduction
On 14 November 2001 the Ministers adopted the Doha
Declaration on the TRIPs Agreement and Public
Health. Since then, Members have focussed most of
their attention on the issue identified under
paragraph 6 of this Declaration. While the European
Communities (hereinafter "the EC") maintain their
position that this issue should be resolved as soon
as possible, the EC believe that it would be equally
useful to focus on the implementation of the Doha
Declaration itself.
The Doha Declaration stresses the need for the TRIPs
Agreement to be part of the wider national and
international action to address public health
problems. It recognises that intellectual property
protection is of key importance for innovation and
in particular the development of new medicines, but
it also recognises the concerns about its effects on
prices.
The Declaration clarifies the relationship between
the TRIPs Agreement and public health policies of
WTO Members, outlines the flexibility of several
relevant provisions of the TRIPs Agreement in
particular with regard to patents, and shows that
they can be interpreted and implemented in ways that
are supportive of public health. While the
Declaration does not amend the rights and
obligations laid down in the TRIPs Agreement, it
provides guidance for the interpretation of the
relevant parts of the TRIPs Agreement. This creates
a safer environment for developing country Members
as well as for suppliers and purchasers of patented
and generic drugs. Finally, the Declaration also
specifies that the least-developed country Members
will not be obliged, with respect to pharmaceutical
products, to implement or apply Sections 5 and 7 of
Part II of the TRIPS Agreement or to enforce rights
provided for under these Sections until 1 January
2016.
II. Ensuring the effective implementation of the Doha
Declaration
4. In establishing intellectual property laws and
related policies, and in particular in implementing
the TRIPs Agreement, developing countries must be
enabled to (a) ensure that an appropriate balance is
found between the need to protect research and
development, through intellectual property, and
public health policy issues, in accordance with
Articles 7 and 8 of the TRIPs Agreement, and (b)
adequately take into account the safeguards and
flexibilities available under the Agreement as
identified in the Doha Declaration.
5. Except for its paragraph 6, for which an adequate
solution is still outstanding, the Doha Declaration
does not call for further work at WTO level1.
However, the implementation of the Doha Declaration
by a developing country or by a least developed
country, in so far as the latter has already
implemented the TRIPs Agreement or put an
intellectual property system into place, may require
legislative, administrative or policy adjustments.
In some instances, Members may deem it necessary to
adjust already existing intellectual property laws.
For developing countries and several least developed
country Members, which have only just made
significant efforts to bring their legislation in
line with the TRIPs Agreement, this may not be an
easy task. It may also require the introduction of
administrative and/or judicial structures,
procedures and disciplines (for instance for
compulsory licensing) which do not yet exist in many
of the countries concerned.
6. The implementation of the Doha Declaration by
developing and least developed countries faces
severe structural challenges. In many instances
technical assistance and capacity building will be
paramount to enable these countries to recognise and
act on the implications of the TRIPs Agreement on
public health policies and establish workable laws,
procedures and practices to give effect to the Doha
Declaration. This will require sound technical
advice on how to best integrate the Doha Declaration
into intellectual property policies and practices.
This advice must be balanced, transparent and
unbiased.
7. In this regard, it is critical that the main
technical assistance providers on intellectual
property, and in particular the World Intellectual
Property Organisation (WIPO) and the WTO, fully
integrate the Doha Declaration in their technical
assistance policy. The WIPO and the WTO are the main
providers of technical assistance on intellectual
property to developing and least developed
countries, in particular through their "Joint
Initiative" on technical assistance in the area of
intellectual property rights for the least-developed
countries. The WIPO-WTO legal and technical
assistance programmes must therefore integrate fully
and completely the effects of the Doha Declaration
and be geared towards standards appropriate to the
specific needs and level of development of the
recipient country.
8. In this respect, it will be appropriate to take full
advantage of the available expertise on health
matters, in particular in the World Health
Organisation. Its observer status, on an ad hoc
basis, in the TRIPs Council, supported by the EC,
allows the WHO to monitor developments on TRIPs and
Public Health. The EC note that the WHO has also
engaged in providing technical assistance to
countries to help them develop informed approaches
to addressing the health implications of
multilateral trade rules2. The EC also warmly
welcome recent steps taken by the WTO as well as by
the WIPO to involve the WHO more closely in their
technical cooperation programmes, and strongly
encourage the WIPO and the WTO to further strengthen
this cooperation and fully associate the WHO in
their Joint Initiative.
III. Specific technical and political issues raised by
the Doha Declaration3
Compulsory licensing
9. In Doha, Ministers confirmed that each WTO Member
has the right to grant compulsory licenses and the
freedom to determine the grounds upon which such
licenses are granted, while respecting the terms
and conditions of Article 31 of the TRIPs Agreement.
10. It is up to each Member to provide for efficient and
equitable granting procedures. Compulsory licensing
is the most important technical issue of the
Declaration : Article 31 of the TRIPs Agreement is
flexible, but imposes a number of procedural
requirements, in order to ensure that the rights of
the right holders are protected, while leaving
sufficient scope to provide for transparent and
expeditious procedures. This requires administrative
and legal infrastructure that is absent in many
developing and least developed countries. These
Members may therefore need technical assistance in
setting it up.
11. In this respect it will be important to ensure that,
for example, where compulsory licences are provided
for, patent legislation clearly defines the grounds
for the granting of these licences, which should
correspond to clear policy objectives (in casu
public health objectives). Also, administrative
and/or judicial procedures must be transparent and
equitable and respect the rights of the patent
holders, while ensuring that the grant of a
compulsory licence is not hindered by unnecessary
delays. In the same vein, equitable, guidelines
must be determined for setting royalty rates for the
remuneration to the right holder.
12. As regards voluntary licensing and differential
pricing, least developed country Members and
developing country Members may need technical
support in terms of setting up an efficient
negotiating machinery in obtaining price reductions
or voluntary licences.
Exhaustion and parallel imports
13. The Doha Declaration confirms that each WTO Member
is free to establish its own regime of exhaustion of
intellectual property rights without there being a
challenge in the WTO dispute settlement system,
subject to the MFN and national treatment provisions
laid down in Articles 3 and 4 of TRIPs. This means
that Members have the freedom to opt for a national,
a regional or an international exhaustion regime.
14. However, account must be taken of the possible
impact of international exhaustion regimes on the
diversion of reduced-price supplies of
pharmaceuticals. One of the most important means to
supply low-priced medicines to the poorest
populations is through price reductions offered by
manufacturers, be it the R&D based industry or the
generic industry. The EU's Programme for Action of
February 20014, which provides for a number of
measures and solutions for combating the most
widespread communicable diseases, encourages
companies to engage into an effective and
sustainable tiered pricing scheme - preferably, at
the lowest price possible. Many of the major
pharmaceutical companies have already launched
specific initiatives along these lines, which the EC
welcome.
15. An essential condition for the implementation of
effective tiered pricing policies by companies is
that markets need to be segmented to prevent low
priced products from flowing back to high price
markets. Otherwise, this may lead to trade
diversion, which will disincentivise companies to
engage in differential pricing. Therefore, Members
may have to adopt measures to avoid diversion of
such products and their (re-)importation into high-
price markets. For those countries which apply an
international exhaustion regime, this would imply
certain exceptions to this regime insofar as low
priced medicines are concerned. Such policy option
would have the beneficial effect of encouraging
supply of medicines at strongly reduced prices5.
IV. The importance of regional cooperation
16. Regional cooperation is not mentioned in the Doha
Declaration itself. However, the EC believe that
regional and/or sub-regional cooperation on
intellectual property matters is highly instrumental
in implementing the TRIPs Agreement, including the
Doha Declaration, by pooling the resources of the
countries participating in such cooperation.
17. In particular, regional institutions dealing with
intellectual property in Africa, such as the
Organisation Africaine de la Propri=E9t=E9
Intellectuelle (OAPI) or the African Regional
Industrial Property Organisation (ARIPO), have
already shown that they can play a vital role in the
implementation of the TRIPs Agreement, and could
play a similar role as regards the Doha Declaration.
For instance, the implementation of an effective
compulsory licensing system for production and
import of products to address public health problems
may likely take the form of a regional arrangement,
based on a common patent system, taking advantage of
the greater political weight of a regional
institution. In particular, regional patent systems
are instrumental in overcoming possible constraints
stemming from the principle of territoriality and
independence of patents. Regional cooperation would
also be extremely relevant with regard to non-
intellectual property issues related to access to
medicines, in particular practical matters such as
bulk purchasing.
18. The EC therefore encourage Members to engage into
regional cooperation arrangements in view of
implementing the TRIPs Agreement in general, and the
Doha Declaration in particular.
V. Conclusion
19. The Doha Declaration provides for a roadmap for the
right balance to be struck between the flexibilities
and safeguards of the TRIPs Agreement, to be applied
where needed in accordance with the provisions,
principles and objectives of the TRIPs Agreement in
order to ensure affordable supply of medicines,
while not discouraging the development of needed new
medicines.
20. The EC are committed to fully take the Doha
Declaration into account in their trade policy, and
in particular as regards technical assistance for
the implementation of the TRIPs Agreement. The EC
therefore call upon all technical assistance
providers, and in particular multilateral
organisations, to join them in taking up this
commitment, and to fully integrate the Doha
Declaration in their policies and practices.
_______________________________
1 The extension of the transition period for least
developed countries with regard to patents and data
protection of pharmaceutical products was put into effect
through a decision of the TRIPs Council of 27 June 2002
(IP/C/25).
2 Information on Technical and Financial Cooperation
Programmes carried out by the World Health Organisation
and that are Relevant to TRIPs Implementation and Access
to Drugs, IP/C/W/376/Add. 3.
3 In this respect, it should be borne in mind that the
principles of the Doha Declaration can also be carried
through to issues other than compulsory licensing or
parallel imports, such as exceptions to exclusive rights
or other policy options.
4 COM (2001) 96 of 21 February, 2001, as updated 26
February 2003.
5 In this respect, although the EU does not have an
international exhaustion regime, the European Union has
taken its responsibilities, and has adopted a Regulation
on 26 May 2003 which prevents pharmaceutical products
sold to developing countries at reduced prices to be
brought back into the European market. It provides for
an extra mechanism for protection, which applies
irrespective of whether these medicines are IP-protected,
in order to encourage companies to supply medicines at
reduced prices.
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