Communication by the European Communities to the TRIPs

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.

Return to: CPTech Home -> Main IP Page -> IP and Healthcare