Implications of the Doha Declaration on the Trips Agreement and Public Health - Health Economics and Drugs Series No. 012
(2002; 56 pages) [French] [Spanish] View the PDF document
Table of Contents
View the documentForeword
View the documentAcknowledgements
View the documentAbbreviations and acronyms
View the documentExecutive summary
View the documentIntroduction
View the documentScope
View the documentThe role of TRIPS and IPRs
Open this folder and view contentsPublic health measures
Open this folder and view contentsFlexibility in TRIPS
Close this folderMembers with insufficient or no manufacturing capacities
View the documentAddressed problem
Open this folder and view contentsPossible approaches
View the documentSafeguards
View the documentCompulsory licence in the importing country
View the documentEconomic feasibility
View the documentLegal implementation
View the documentTransfer of technology to LDCs
View the documentExtension of transitional period for LDCs
View the documentSpecial treatment under TRIPS
View the documentLegal status of the Doha Declaration
View the documentIssues not covered in the Declaration
View the documentConclusions
View the documentAnnex 1 - Doha Declaration on the TRIPS Agreement and Public Health
View the documentAnnex 2 - Levels of development of pharmaceutical industry, by country
View the documentReferences
 

Addressed problem

To determine the problem addressed under paragraph 6, it must be read in the context of paragraphs 1 to 4 of the Doha Declaration. As mentioned above, though the Declaration specially refers to the problems resulting “from HIV/AIDS, tuberculosis, malaria and other epidemics”, it is intended to provide solutions to “health problems” in general. There is nothing in paragraph 6 limiting its application to cases of crises or public emergency.

Paragraph 6 refers to “manufacturing” capacities in the pharmaceutical sector. “Manufacturing” is the “making of articles by physical labor or machinery, especially on large scale64. This suggests - based on the ordinary meaning of the words used, as mandated by the Vienna Convention - that the Declaration is intended to address the problems that arise when production on a large scale, that is, in an economically viable manner, cannot be conducted.

64The Concise Oxford Dictionary, p. 617 (emphasis added).

The pharmaceutical sector includes - as indicated in Annex 2 - both the manufacturing of active ingredients (that is, the compounds that possess therapeutic activity) as well as of finished products or pharmaceutical formulations (active ingredients and the excipients added, as necessary, for the administration of a medicine to a patient). Paragraph 6 does not distinguish between these two categories of activities. It should be interpreted, therefore, that paragraph 6 addresses the lack of or insufficient capacity either to produce active ingredients or pharmaceutical formulations or both.

A country may have the technical capacity to produce active ingredients or formulations, but such production may not be economically viable. One of the main objectives of the Doha Declaration is to “promote access to medicines for all” (paragraph 4). This objective would not be achieved if low-priced medicines (and other health-care products) could not be produced because meaningful economies of scale were out of reach. A “solution” under paragraph 6 may be illusory if it does not benefit countries where manufacturing may be technically feasible but not economically viable.

The determination of the coverage of paragraph 6 raises other interpretive issues, namely:

(a) Does paragraph 6 refer to medicines only, or does it encompass any health care product? To the extent that a product is expended through pharmacies (such as diagnostic kits), it will fall under the ordinary meaning of a “pharmaceutical” product65.

65 “Pharmaceutical” is “of or engaged in pharmacy; of the use or sale of medicinal drugs” (The Concise Oxford Dictionary, p. 768). It is also opens the possibility, given the broad scope of the Doha Declaration, as mentioned above, for Members to discuss the inclusion of other products, such as testing equipment.

(b) Does the notion of “capacity”66 refers to the general capacity to manufacture or to the capacity to manufacture a particular product? A country may have manufacturing capacity in general to produce active ingredients or formulations, but lack the equipment, technology or access to the intermediate chemicals necessary to produce a particular product. For instance, some countries may be able to manufacture relatively simple drugs, but not anti-retrovirals, where production and quality control standards are extraordinarily important because of the risk of drug resistance and/or toxicity. A reasonable reading of paragraph 6 suggests that it is intended to address both the cases of general and particular lack or insufficient capacity, since otherwise it would not be possible for the concerned country to address its “health problems” (paragraph 1) and to “protect public health” (paragraph 4).

66 “Capacity” is the “power of containing, receiving, experiencing or producing” (The Concise Oxford Dictionary, p. 136).

Under this interpretation, the solution to be worked out in line with paragraph 6 should not be based on the determination of categories of Member countries with or without manufacturing capacity, or with or without a sufficient manufacturing capacity. Rather a solution should apply to any Member, or at least to any developing country or LDC where the effective use of compulsory licensing is not possible because of capacity limitations and insufficient market demand.

(c) Who can receive compulsory licences in the exporting or the importing country? Pursuant to paragraph 6, recipients clearly may include State as well as commercial entities. There is no limitation under Article 31 in this respect, and it would be contrary to the objective of the Doha Declaration to exclude the possibility of granting the required compulsory licence to a for-profit entity.

(d) Where should potential suppliers of medicines be located? Potential suppliers of the required medicines may be located in developed and developing countries alike67. The purpose of the Doha Declaration is to alleviate grave public health problems, independent of the location of the source of supply. Hence, in order to effectively implement the Declaration, both developed and developing countries should introduce legislative changes, as necessary, to allow exports to countries in need.

67 Thus, in July 2000, a Canadian generic pharmaceutical manufacturer announced that it could supply, at cost, alternatives to the major AIDS treatments for developing countries within months, if the Canadian Federal Government granted the needed compulsory licences under the Patent Act.

(e) Can countries where no patent protection exists benefit from a solution under paragraph 6? Since a compulsory licence can only be granted when a patent exists, paragraph 6 seems to relate only to cases where a pharmaceutical patent is in force in the importing country. This would include cases where product or process patents have been granted68, but would exclude and seriously disadvantage69 countries where no patent protection for pharmaceuticals is granted70, or even countries where such protection exists but where the needed product or process is, for any reason71, off-patent. Finding a solution to the problems of these latter countries will be an essential component in the implementation of the Doha Declaration, if not specifically under paragraph 6, as a part of the “action” necessary to address the public health problems that afflict developing countries and LDCs (see paragraphs 1 and 2 of the Declaration)72.

68 It would also cover cases where patents on new uses have been conferred, if admissible under the relevant national law.

69 See the joint letter sent on January 28, 2002 to the TRIPS Council members by Consumer Project on Technology, Médecins Sans Frontières, Third World Network, Oxfam, Health Gap Coalition and Essential Action.

70 As discussed below, LDCs have been authorized by the Doha Declaration to delay such protection until 2016.

71 Because a patent has not been applied for, has been rejected or cancelled.

72 It should be noted that nothing would prevent the Council for TRIPS from considering a situation not expressly mentioned in paragraph 6 of the Declaration.

(f) Does paragraph 6 cover cases where an authorization for governmental use has been accorded? Though it is possible to distinguish between “compulsory licences” and authorizations for governmental use73, their effect is similar and they are jointly treated in Article 31 of the TRIPS Agreement. There is no reason to exclude government use authorizations from the coverage of paragraph 6.

73 While in the case of compulsory licence a private party may be authorized to use and commercialize the invention for a profit, under governmental use the exploitation of the invention should be made to satisfy a governmental need, for non-profit purposes. This includes the case - for example - in which a private company produces a patented drug, as a subcontractor, to supply the government, who distributes the drug through public hospitals.

Box 1

Designing a Solution to the Paragraph 6 Problem

In considering approaches to implement paragraph 6, it is vital to consider the efficiency and workability of alternative approaches. This will not only depend on the decisions adopted in the framework of WTO but, crucially, on the steps taken at the national level to introduce legislative changes necessary to implement the adopted solution.

Some of the desired features of any possible solution would include:

• stability of the international legal framework, in order to ensure a long-term solution;

• transparency and predictability of the applicable rules in the exporting and importing countries, so as to provide the required incentives to the private sector to act within the established framework;

• simple and speedy legal procedures in the exporting and importing countries, to allow for the fast supply of needed medicines, with the required quantity and quality;

• equality of opportunities for countries in need of medicines, even for products not patented in the importing country and for countries which are not WTO Members74;

74 There are a significant number of countries which are not members of the WTO (while many are negotiating accession) that may face the problems addressed in paragraph 6.

• facilitation of a multiplicity of potential suppliers of the required medicines, both from developed and developing countries;

• broad coverage in terms of health problems and the range of medicines (not limited to certain diseases or products).

In addition, the legal solution should not be encumbered with limitative conditions that could deprive it of practical value, nor should it limit the grounds for granting compulsory licences.

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