Joint Statement by MSF, Oxfam, World Vision, Australian Council for Overseas Aid on the Sydney Negotiations

Statement on TRIPS and Access to Medicines

NGO Meeting with Trade Ministers

Informal Trade Ministers Meeting, Sydney, 14 November 2002

Thank you for the opportunity to address this Informal Meeting of Trade Ministers. On behalf on non-governmental organisations that are working in developing countries and/or advocating for health, I would like to raise an issue that is crucial to the future health of people in developing countries: that is, the effective use of compulsory licensing and the export of generic medicines to countries in need.

The magnitude of the AIDS crisis has drawn attention to the fact that millions of people in the developing world do not have access to the medicines that are needed to treat disease or alleviate suffering. Each day, eight thousand people die of AIDS in the developing world. The reasons for the lack of access to essential medicines are manifold, but in many cases the high prices of drugs are a major barrier to needed treatments. Prohibitive drug prices are often the result of strong intellectual property protection. This situation will become dramatically worse in the near future unless you act in the coming months.

I would like to stress that the access to medicines crisis is not confined to epidemics like AIDS. Is it acceptable to allow affordable medicines for certain diseases but not for others? Determining which medicines for which diseases will be accessible should not be a matter of trade policy. There is no medical rationale to limit solutions to specified serious health problems. We therefore recommend that you look for solutions to overcome intellectual property barriers which limit access to health care products that are supportive of WTO member' rights to protect public health overall. This is consistent with the language of the Doha declaration on TRIPS and Public Health.

There is growing global consensus that there should be no barriers to the use of generic medicines in developing countries. Quality generic medicines allow many more people access to treatment, particularly in developing countries. Generic medicines are generally much lower priced than their brand-name equivalents. The differences are significant - with up to 97% reductions in price. After full TRIPS implementation, the availability of these affordable generic medicines will increasingly depend on compulsory licences and therefore allowing cross border trade of these medicines will be crucial.

A key issue that remained unresolved in Doha is how to ensure that production for export to a country that has issued a compulsory license, but does not have manufacturing capacity, can take place within a country that provides pharmaceutical patents. Since Article 31(f) of the TRIPS Agreement limits compulsory licensing predominantly to supplying the domestic market, further measures are necessary to ensure that countries without production capacity can make use of compulsory licensing provisions to the same extent that countries with manufacturing capacity are able to use these provisions. The Doha Declaration acknowledges the problem in Paragraph 6:

We recognize 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. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002.

We encourage you to support a solution to the paragraph 6 problem that is practical, effective, economically viable, free from onerous conditions and permanent. It must:

We believe that the mechanism that best fulfils all these criteria is an exception under Article 30 of the TRIPS Agreement.

This would allow "production for export" activities to be defined under national law as exceptions to the rights of patent holders. Such an exception is the most efficient as it would not require any extra procedural steps in the exporting country which might result in the permission for export being denied or delayed. At the request of an importing country, and after the granting of a compulsory license in that country if necessary, medicines could be automatically produced and exported - providing an efficient mechanism for meeting public health needs.

Long-term solutions to access to medicines for poor nations will depend on increased local production of medicines in developing countries. There are few countries in the world who have large enough local markets to be able to sustain a domestic pharmaceutical industry. To ensure that generic producers are viable in the long-term - they have to be able to have access to export markets. In the words of the UK Commission on Intellectual Property Rights " The crucial issue is that the economics of supply to one particular country with a limited market may be insufficient to attract potential generic suppliers". An Article 30 exception provides the necessary framework for such access and the development of a pharmaceutical industry in the developing world.

In its statement to the TRIPS Council in September, the World Health Organization also acknowledges this solution as the most viable from a health point of view:

"Among the solutions being proposed, the limited exception under Article 30 is the most consistent with this public health principle. This solution will give WTO Members expeditious authorization, as requested by the Doha Declaration, to permit third parties to make, sell and export patented medicines and other health technologies to address public health needs."

Indeed, the European Parliament recently adopted the following amendment to the European medicines regulation that is based on the same principle :

"Manufacturing shall be allowed if the medicinal product is intended for export to a third country that has issued a compulsory license for that product, or where a patent is not in force and if there is a request to that effect of the competent public health authorities of that third country."

We also encourage trade ministers to start discussion on the failure of the global trade and patent system to provide incentives for research and development for neglected diseases. These discussions should focus on alternatives to promoting research and development and on designing mechanisms to enhance the research capacity in developing countries through knowledge and technology transfer.

We are aware that at Doha, members were charged with finding a solution to the production for export problem and reporting to the General Council before the end of 2002.

However we are concerned that developed countries such as the EU, the US and Australia are focusing on solutions to gain consensus on the paragraph 6 problem that are temporary, unworkable, economically unviable and include onerous conditions and limitations. The US and EU proposals may satisfy the demands of the European and American multinational pharmaceutical industry, but will be to the detriment of the health and lives of people. Agreeing on a solution, which superficially takes into account some concerns of developing countries whilst failing to guarantee long-term access to generic medicines by developing countries, is squandering the achievements of the Doha declaration on TRIPS and Public Health, which called for measures to assure access to medicines for all.

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