WTO Forum: Bypassing International Agreements May Hamper Medicines Access

Access to medicines in developing countries may be put at risk by European customs regulations and more broadly by trade provisions in most free trade agreements between developed and developing countries, said speakers at the recent World Trade Organization Public Forum.

The WTO Public Forum is a yearly gathering of a variety of stakeholders to discuss trade issues. This year’s forum from 28-30 September was entitled, “Global Problems, Global Solutions: Towards Better Global Governance.”

The detention of medicine in transit is having health consequences in developing countries and a change of the European Union customs laws is in order, according to speakers at a panel organised by Médecins Sans Frontières (MSF).

Michelle Childs of MSF said that in the case of the Netherlands detaining shipments of Indian-manufactured generic medicines, patents neither existed in the country of origin, nor in the country of destination, and the drugs were not meant for domestic consumption in the European Union.

Many developing countries lacking manufacturing capacities have to import affordable drugs so trade between those countries is essential, she said.

For Carlos Correa, professor at the University of Buenos Aires, this is a legal issue. Article 5 of the WTO General Agreement on Tariffs and Trade (GATT) states that member countries must insure freedom of transit and all charges and regulations imposed are to be reasonable, he said, adding that preventing the transit of medicine did not seem reasonable.

Patent rights are territorial by nature, Correa said, and they can only be exercised in the jurisdiction in which they have been granted. The detention of goods in transit for alleged IP infringement goes against the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, he said.

Neither Dutch nor any other EU customs officials are competent authorities to determine if there is a patent infringement in the country of importation, Correa said.

In the pharmaceutical sector, there is a major proliferation of patents around any single active ingredient, Correa said, adding that the EU Commission, in a report on competition in the pharmaceutical industry, said that for one blockbuster drug, there were about 1,200 patents or patent applications in the EU.

So it is extremely difficult for a customs officer to determine whether there is infringement in the first place, he said. The EU regulation must be reviewed, Correa said, for the matter of goods in transit but also for its applicability to patent infringement, which, as it stands now “is really prone to abuses by patent owners” who can use these thickets of patents to prevent legitimate trade.

For Sunjay Sudhir, counsellor at the Permanent Mission of India, EU customs regulations have a negative impact on universal access to medicines, national public health budgets, legitimate trade in generic medicines, and they “impair the efforts of civil society organisations engaged in providing medicines and improving public health in the least developed part of the world.”

EU regulation 1383/2003 concerning customs action against goods suspected of IP infringement is open to interpretation, Sudhir said. “The Damocles sword is always hanging,” and by experience, the sword falls more often on generic drugs than on mobile phones, he said.

Sudhir said it is ironic that the EU provides funds for public health programmes in developing countries and at the same time creates barriers to legitimate trade in generics, hampering access to medicines.

There are fears that decisions taken under regulation 1383/2003 reflects a larger design for tougher enforcement of IP rights, part of which is a campaign of deliberately confusing quality concerns with IP rights in international organisations. The issue has arisen in the World Health Organization, and can be noticed in TRIPS-plus elements in bilateral free trade agreements, and the Anti-Counterfeiting Trade Agreement (ACTA) under negotiation to the exclusion of many countries, including developing and least-developed countries, according to Sudhir.

Regulation 1383/2003 should be reviewed and brought into line with TRIPS, GATT, and the Doha Declaration on the TRIPS agreement and public health, he said.

Much “Noise” About Nothing?

Luc Devigne of the European Commission trade directorate said very few cases of medicine detention happened in 2008, so there was “much noise about nothing.” Devigne said the discussion was about a very limited number of cases, all in the past, and which had been explained in detail. The European Commission disagrees that it could be considered as a policy. “We are probably talking about a nano-percentage” of the medicine transiting through the EU, he argued.

The EU goal is not to hamper generic medicines, he said, and the Union remains totally committed to its policy of access to medicines. “We are committed to the Doha Declaration,” and to the global fund on HIV/AIDS, Devigne said. The main objective of the customs regulations is to prevent IP rights infringement and the trade of counterfeit goods, which is a growing concern, he said.

“It is true that the two issues of generics and fakes are separate but it is also true that the EU customs probably saved lives around the world by stopping fakes,” Devigne said.

A review of the EU customs regulation is foreseen, he said, independently from the detentions, and anyone who has an interest can provide comments for the review. “I have heard what has been said here,” he said.

Seizures under 1383/2003 are an attempt at extraterritorial enforcement of patent rights, said Jose Estanislau do Amaral, counsellor at the Permanent Mission of Brazil. This regulation can potentially disrupt international trade in generic medicines since the impact is not confined to individual transactions. Repeated seizures create uncertainty and may lead countries to try to avoid certain transit routes, bringing unnecessary transactional costs that might be added to the price of the medicine, he said.

Silke Trommer, researcher for the Centre of Excellence in Global Governance Research at the University of Helsinski, Finland, in a separate panel about access to medicines in developing and least-developing countries warned against provisions in free trade agreements.

In several agreements, she said, the scope of patent protection is extended by patenting the new use of an old product, for example, in what is called evergreening of existing patents.

FTAs can also contain restrictive marketing approval procedures. For example, in a US-Chile agreement, the approval of a generic drug was prohibited during the patent term unless it was authorised by the patent holder. “This does not exist under TRIPS,” Trommer said. There also might be an attempt at preventing compulsory licensing by limiting the practice to national emergency situations only.