Lamy Challenges Discontented WTO Members To Use TRIPS Public Health Review

By William New
Confronted with longstanding assertions that World Trade Organization rules intended to bring greater access to medicines to poor countries are not working, WTO Director General Pascal Lamy said Tuesday discontented members should use the annual review of those rules if they have a complaint.

“It is precisely to address these kinds of situations that WTO members agreed to subject this system to periodic review,” Lamy told a generics industry gathering. “I would note that WTO members did not raise concerns during the last annual review of the operation of the system and instead, led by the African Group, reaffirmed the system two years after its adoption.”

Lamy spoke to the 11th annual conference of the International Generic Pharmaceutical Alliance being held in Geneva from 8-10 December. Lamy’s four-year term as director general ends late next year, but he will run again and so far appears to be unopposed.

At WTO, the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) sets the rules on access to medicines. In August 2003, the WTO General Council adopted a Decision on the Implementation of Paragraph 6 of the 2001 Doha Declaration on the TRIPS Agreement and Public Health. Paragraph 6 called for a resolution to the problem of countries lacking pharmaceutical manufacturing capabilities but who see a need to obtain cheaper medicines through a compulsory licence. The 2003 Decision created a waiver to the WTO rule that products manufactured under compulsory licence must be substantially all for the domestic market.

Paragraph 8 of the 2003 Decision required the TRIPS Council to review annually the functioning of the system set out in the Decision with a view to ensuring its effective operation, and annually report on its operation to the General Council.

So far, Lamy said, no country has raised significant concern in this review.

But a developing country official attending the speech afterward questioned the validity of the review process. “What review?” he said. “There isn’t really a review.”

Only one developing country has used the paragraph 6 process so far in five years – Rwanda, in September, with Canada. Health activists have repeatedly said the waiver is too cumbersome to be useful and effective.

Asked afterward whether intimidation by developed nations might be hindering smaller economies from using flexibilities, Lamy told Intellectual Property Watch that Rwanda offers evidence to the contrary.

But in his speech, he left open the possibility that the WTO processes of continuous improvement might ultimately lead to further changes. “Just like any WTO agreement, the paragraph 6 system should be periodically reviewed and lessons drawn from these evaluations so that the WTO can continue its effort to make it work as a contribution among others to enhancing access to medicines,” he said.

Generics producers tend to be sceptical of rules protecting patent rights holders, most of whom are in developed nations. In recent years, critics have increasingly pointed to patents as a deterrent to the effective flow of critical medicines to the poor worldwide.

But Lamy gave a view frequently repeated by the brand-name industry: that intellectual property rights “constitute only one piece of a much bigger puzzle that determines the level of access to medicines in a given country.” The other factors include infrastructure and the national health system, or the procurement regime. And he highlighted the industry argument that tariffs on imports of healthcare products are problematic, plus cited the need for stronger protection against counterfeit products as well.

Other Views

Other participants highlighted shortcomings in the current IP system and TRIPS in relation to access to medicines. Michelle Childs of Médicins Sans Frontières (MSF) pointed to a problem of patent linkage, in which she said US and European originator industries are pressuring drug authorities to link the market approval process of generic medicines to the patent status of the reference product. This has the effect of bolstering patents without proper consideration, interferes with the ability to use TRIPS flexibilities and is TRIPS-plus, she said.

Childs discussed a proposed patent pool approach for medicines, proposed by UNITAID and recognised by key World Health Organization bodies. She said it offers potential benefits to generics producers.

Christoph Spennemann of the UN Conference on Trade and Development and others described the impact of data exclusivity on generics production, as originator companies in the past have managed to get 5-10 years of exclusive rights over their test data, which can delay the introduction of generics after the patent expires.

Julia Pike, IP director and counsel at generics distributor Hospira, described the legal battles happening around the world between generics and brand-name companies. She and Yehuda Livneh, general patent counsel at generics producer Teva Pharmaceutical, said patent holders must see a bigger financial impact to losing cases in order to deter them from abusing their patent rights. Involving third parties and measuring damages can increase this impact, Pike said. Teva won a big case against Abbott in the Netherlands but the cost was not very high to Abbott when it lost, one said.

Roger Kampf of the WTO, speaking on his own behalf, raised doubt that industries would be very interested in patent pooling, and said that a proposal by Pike for a common Europe-wide litigation framework with common procedures would be a TRIPS-plus measure. “That shows that TRIPS-plus does not always come from the R&D industry, but can also come from your side from time to time,” Kampf said.

Separately, a presenter from China at the event showed statistics that said China will be number two in the generics industry after the United States by 2012. Meanwhile, a Japanese generics industry presenter said a new initiative is underway to kickstart Japan’s flat growth in generics.

Lamy: ‘Guardian of TRIPS Flexibilities’

Lamy highlighted the rights of WTO members to use flexibilities in TRIPS for public health reasons. An event organiser referred to Lamy as the “guardian of the TRIPS flexibilities,” which are important to the generics industry.

Lamy acknowledged that so-called TRIPS-plus provisions – those that reach beyond what was agreed in TRIPS – may have a negative impact in bilateral trade agreements with small countries. “Certain of the provisions may potentially have a bearing on access to medicines, as well as on the generic industry,” he said. But he noted that developed countries negotiating such terms have more recently insisted such provisions are “not meant to affect the ability of the parties to take measures to protect public health.”

In the end, Lamy called on the generics industry, with its ample global market share, to participate more fully as a stakeholder on issues of access to medicines. The problems have ameliorated, but further improvements can follow.

“We are open to review, to draw lessons on what works and does not work,” Lamy said. “I accept this notion that I should be guardian of the TRIPS flexibilities.”

WTO Negotiations: TRIPS on Sideline

Meanwhile, in ongoing negotiations at the WTO, TRIPS issues appear to be on hold while agriculture and industrial goods talks are addressed and a decision is made on whether to hold a ministerial next week. Norwegian Foreign Minister Jonas Store is being tapped again by Lamy to lead discussions on TRIPS issues but the minister is waiting to come in a ministerial context, not now, an official from a TRIPS amendment proponent nation said.

William New may be reached at wnew@ip-watch.ch.