URFIG-supported Document about TRIPS
THE
RIGHT TO MEDECINES OR THE RIGHT
TO
PROFIT FROM MEDECINES ?
(Oxfam, 12 October
2002)
Trade ministers sitting down for discussions in Sydney
this week could play a key role in improving access to vital medicines for
millions of people across the world.
The ministers, from 25 leading nations, will be looking
at the critical issue of how to revise WTO patent rules so that poor countries
can more easily import affordable generic drugs.
The outcome will affect the more than 15m people who die
every year from infectious diseases and the 40m (and rising) people who are
living with HIV/AIDS.
Exactly one year ago, in a landmark declaration, the WTO
Ministerial Conference in Doha stated that public health should take precedence
over the patent rules enshrined in the TRIPS agreement.
Ministers pledged to correct an absurd and damaging
anomaly in the agreement that allows developing countries to import generic
medicines, but restricts producer countries from exporting them (see note 2).
A deadline was set at Doha and ministers pledged to
deliver the changes by the end of 2002.
But in the 12 months since Doha, no change has been
achieved as rich countries, led by the US, are fighting a rearguard action to
maintain the status quo.
Oxfam believes the rich countries, under the influence of
giant pharmaceutical companies, are blocking the changes, despite the deep
concerns of all developing countries. Ironically though, an impasse on TRIPS
could end up derailing the entire Doha trade round, which rich countries would
see as disastrous.
Oxfam spokesperson Michael Bailey, from the Make Trade
Fair campaign team, says: "Thanks to worldwide public concern and the
commitment of developing country governments, we can get a solution to the
problem, but it's not in the bag.
"The big drug companies don't want to lose revenue
from their patented products and are lobbying hard for a raft of limitations on
any change to the rules. But this would render the 'solution' virtually
worthless." (see note 3)
At Sydney, Oxfam is calling on rich countries to come
into line with the position held by developing countries.
Any emerging consensus could then be discussed and
approved by all member states at the WTO Council meeting, on December 10, in
Geneva.
At the moment, TRIPS
is highly discriminatory.
It allows rich countries to override medicine patents in
the public interest and to commission generic equivalents from another
manufacturer but effectively denies this right to poor countries, which are the
ones that most need affordable medicines.
Almost all developing countries are caught in a Catch-22
situation. They don't have the technology or size of market to manufacture
affordable generic versions of new medicines for themselves but TRIPS restricts
any other country from supplying them.
The bottom line is that they have to either pay the high
price of the patented product ? which they can ill-afford ? or go without.
Michael Bailey says: "The fact that rich countries
can bargain effectively over prices but a developing country is at the mercy of
Goliath-sized companies often bigger than its national economy, is yet one more
double standard in WTO rules."
Oxfam, along with most developing-country governments and
NGOs, believes there is a straight-forward way to honour Doha and grant
developing countries the same rights to affordable medicines as those enjoyed by
rich countries.
WTO should agree that countries can export generic
versions of patented
products to countries where there is no patent or where
it has been
legitimately suspended. This revision to TRIPS should be:
-
fair, permanent and permit economically viable production
-
beneficial to all developing countries and covers all diseases
-
quick, simple and easy to operate
-
free from extra WTO obligations on developing countries
-
agreed by end 2002
Oxfam believes the best legal mechanism to achieve this
is for WTO
The formal proposals of the industrialised countries may
appear reasonable at first sight but are unacceptable.
The US calls for a 'waiver' on WTO trade disputes over
the rule restricting exports. This is a fatally-flawed proposal, since the
measure is temporary, easily reversed and tied to excessive restrictions on its
use.
The EU appears better-intentioned, presenting itself as
an honest broker seeking political compromise between the US, traditionally the
fierce defender of corporate interests, and developing countries. But while it
agrees to amend TRIPS, the EU attaches even more conditions ? making a mockery
of declared fine intentions. The EU proposal would exclude many killer diseases
such as pneumonia and hepatitis and would deprive 72 developing countries
including Peru, the Philippines and China, from the principal benefits.
Michael Bailey says: 'If the Europeans don't support the
developing-country position, we will end up with essentially the same rules but
rigged in a different way. The Europeans will trumpet success, but for the sick
and poor, nothing will have changed."
Oxfam believes that rich countries should not make
lifting any barriers to affordable medicines conditional upon developing-country
concessions in other areas of trade policy. It would be grossly unfair for
developing countries to have to pay twice to rectify this profoundly damaging
agreement. Michael Bailey says: "Poor people's health should not be a
bargaining chip in the Doha Round."
As European trade officials and company lawyers have
admitted to Oxfam, the real choices surrounding this change to TRIPS do not
concern technical or legal mechanisms - they are essentially political in
nature.
Notes:
1)Campaign action by NGOS
Oxfam has joined scores of NGOs from all over the globe
to put pressure on key trade ministers between now and the WTO Council Meeting,
on December 10 to bring about a solution that will allow developing countries to
import affordable generic versions of vital new medicines.
Campaigners are being asked to write to or e'mail
ministers including Pascal Lamy, Trade Commissioner for the European Commission,
and Robert Zoellick, chief US trade representative.
Other NGOs driving the campaign action include: ActionAid
Alliance; Consumer Project On Technology, US; Health GAP, US; Health Action
International; Lawyers Collective' HIV/AIDS Unit, India; Medecins Sans
Frontieres; Oxfam International; Thai NGO Coalition on AIDS and Thai Network of
People with HIV/AIDS; Third World Network; Treatment Action Campaign, South
Africa.
2) The current anomaly in TRIPS
Under TRIPS, the US or UK government can override a
patent on a medicine using a 'compulsory license' and commission a domestic
company to produce a generic equivalent. This 'last resort' greatly enhances the
government's ability to negotiate reasonable prices with the patent-holding
manufacturer. Developing countries can also issue compulsory licenses but, with
few exceptions, don't have the required domestic manufacturing capacity to
produce a generic equivalent, or cannot produce at an economic price. They
cannot import generics because TRIPS prevents any producer country where there
is patent in force from exporting to them. The 49 least-developed countries,
which thanks to a revision of TRIPS at Doha are not required to have
pharmaceutical patenting at all before 2016, are also denied access to imported
generics for the same reason.
Correcting this anomaly is a vital next step to improve
access to affordable medicines. It is, however, a measure that limits the damage
caused to poor countries by TRIPS - it does not avoid the need for a more
substantial review of the agreement from a public health and broader development
perspective.
3)The rigged rules that industrialised countries and big
drug companies seek to impose :
a) The 'solution'
should only apply to AIDS, TB and malaria, and only to medicines
Oxfam objection: there is no rationale for restricting scope to these
diseases. There are many other diseases that ravage developing countries, for
which the treatments are, or will be, patented and expensive. For example,
Hepatitis C, which can be fatal, affects 8-10 million people in Egypt alone.
Drug-resistant diseases are spreading fast, with enormous human cost: pneumonia
kills hundreds of thousands of children every year, while gonorrhoea causes
immense suffering for millions of women. Half the victims of the major
non-communicable diseases (cardiovascular diseases, cancer, diabetes, chronic
respiratory diseases and hereditary disorders) are now from the developing
world, often from poorer communities.
The solution should not only cover medicines but also
vaccines, diagnostic kits and other health products, as these can be patented
and expensive.
b) Beneficiary
countries should only be the 49 least-developed countries or the low-income
developing countries.
Oxfam objection: this condition denies equal rights of access to generic
medicines for at least 72 developing countries that cannot, with the probable
exception of China, produce these generic version of new drugs for themselves,
or do so at a reasonable price. Tens of millions of needy people in countries
with limited public health budgets, such as Brazil, Peru, the Dominican Republic,
South Africa, Honduras and Namibia would be excluded from benefit.
Developing countries also argue that the mechanism should
allow countries in a regional trade agreements to import generics as a group, or
that one of the members should be able to supply the regional market with
generics, which would permit economies of scale. In addition, Oxfam supports
their complementary proposal that North should help to improve capacity in their
pharmaceutical sectors by transferring know-how and technologies, since a
thriving local industry is the best guarantee of improved access to medicines
and overall 'health security'. In the longer term, prospects for such industries
will be greatly enhanced by much more substantial reform of the patent rules.
c) The
exporting-country government must issue a 'compulsory licence' to permit
production and export of the generic version of the patented product, on a
case-by-case basis.
Oxfam objection: It is totally unreasonable to expect the importing
country to depend on the political will of another government for access to
affordable medicines. Pakistan might need to commission a drug from a
manufacturer in India, which is one of the very few developing countries with a
sophisticated pharmaceutical industry. It should not have to depend on the
Indian government's willingness to authorise such production. Moreover, the
exporting country would be vulnerable to external pressure not to give its
consent. Having to seek compulsory licences in both importing and exporting
countries also adds to the administrative burden.
d) Developing
countries must negotiate with the patent holder prior to using the mechanism,
can only resort to it if the price offer is unsatisfactory, and must formally
notify the WTO of their intention.
Oxfam objection: these conditions are unfair because they go beyond
existing TRIPS obligations faced by a rich country if it decides to override a
patent; they are designed to slow down and complicate the whole process for a
developing country.
e) Only developing
countries should be able to produce for export under this mechanism.
Oxfam objection: this condition sounds enlightened but is intended to
reduce the number of potential suppliers of generic medicines, to the advantage
of the big drug companies. Any country should be allowed to export under the
mechanism.
f) Developing
countries should undertake measures to prevent the flow of generic medicines
back to the markets where the drug is under patent.
Oxfam objection:
the main burden for this should rest with industrialised countries, which
already have the means for enforcement (e.g. the recent European proposal to
label reduced-price medicines destined for developing countries in order to
police illegal re-imports back to Europe). Any measures required of developing
countries should be proportionate to the problem, and to their capacity.