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Implementation of the WTO General Council Decision on Paragraph 6 of the DOHA Declaration on the Trips Agreement and Public Health - Health Economics and Drugs Series No. 016
(2004; 49 pages) View the PDF document
Table of Contents
View the documentAcknowledgements
View the documentIntroduction
View the documentCircumstances in which the Decision may be used
View the documentCompulsory licence in the importing country
View the documentCompulsory licence in the exporting country
View the documentAnti-diversion measures
View the documentSuspension of the system
View the documentConclusions
View the documentAnnex 1: WTO Decision of 30 August 2003 (WT/L/540)
View the documentAnnex 2: Summary of context and steps required to use the system
 

Introduction

Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health,1 adopted at the Fourth World Trade Organization (WTO) Ministerial Conference (9-14 November 2001), instructed the WTO Council for TRIPS (Trade-Related Aspects of Intellectual Property Rights) to address how WTO Members lacking or with insufficient manufacturing capacities in pharmaceuticals can make effective use of compulsory licensing. Many developing countries and the least developed countries (LDCs) cannot produce either active ingredients or formulations, due to lack of technology, equipment, human resources or economic viability of domestic production. While these countries may issue compulsory licences to import generic versions of patent-protected medicines, TRIPS rules impose constraints on the ability of countries to authorize exports of such products. Paragraph 6 promised a solution to the export problem caused by these constraints.

1 WT/MIN(01)/DEC/2, 20 November 2001, hereinafter “the Doha Declaration”.


Currently, some developing country Members of WTO do not yet provide patent protection for pharmaceutical products. Some companies in these countries produce generic versions of pharmaceuticals at prices significantly lower than those offered by brand name companies. Those products may legally be exported freely to other countries, provided that a) they are not covered by patents in the importing country; or b) if the product is patent protected in the importing country, that a compulsory licence is granted there. The problem is that, as product patents for pharmaceuticals become enforceable in accordance with the TRIPS Agreement,2 countries with industrial and export capacity will face legal obstacles to produce and export cheap generic copies of patented medicines.

2 By 2005 at the latest, all WTO Members (except least developed countries) must provide patent protection for pharmaceutical products.


If a product is deemed covered in an exporting country by the exclusive rights granted to the patent owner, production for export could take place under a compulsory licence.3 However, the TRIPS Agreement establishes that, unless a compulsory licence is granted to remedy anti-competitive practices (Article 31 (k)), it must "predominantly" supply the licensee's domestic market (Article 31 (f)). This means that if a company received a request to manufacture and export a product that is covered in the manufacturing country by a third party’s patent, it would not be able to do so (in the absence of patent owner authorization), to the extent that production were predominantly for export and not for the manufacturer’s domestic market.

3 Production for export, however, may be deemed admissible under Article 30 of the TRIPS Agreement. See, e.g. Commission on Intellectual Property Rights, Integrating Intellectual Property Rights and Development Policy, London, 2002, available on the Internet at www.iprcommission.org; Correa C, Implications of the Doha Declaration on the TRIPS Agreement and Public Health, Geneva, WHO, Health Economics and Drugs, EDM Series No. 12, 2002.


As a result of these legal constraints and, although countries without sufficient manufacturing capacity in pharmaceuticals could issue a compulsory licence for the importation of products they cannot manufacture, they will not be able to find export sources of affordable new medicines.

The Doha Declaration directed the Council for TRIPS "to find an expeditious solution to this problem and to report to the General Council before the end of 2002". An agreement to address the problem was finally reached on 30 August 2003,4 based on a compromise developed by the Chair of the TRIPS Council5 and on a "Statement" by the Chair of the General Council6 that "represents several key shared understandings of Members regarding the Decision to be taken and the way in which it will be interpreted and implemented".

4 See WT/L/540, available on the Internet at www.wto.org (hereinafter “the Decision”). The Decision is reproduced in Annex 1.

5 See the text of the Statement by the Chairman of the Council for TRIPS of 16 December 2002 (JOB(02)/217).

6 See WT/GC/M/82, para. 29, available on the Internet at www.wto.org.


This paper examines the ways in which the Decision can be implemented in prospective importing and exporting countries. It is addressed to policy-makers and to potential suppliers and purchasers of pharmaceutical products.7 The analysis is motivated by a desire to serve a number of public health objectives, namely the need to a ensure:

7 Importation under the Decision may be undertaken by governments as well as by non-governmental organizations (NGOs), public or private hospitals, companies and other entities.

• a rapid and effective response to public health needs;

• equality of opportunities for countries in need, irrespective of the patent status of a drug in the importing country, and without regard to its membership in the WTO;8

8 There is 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.


• the sustainability of quality supply at affordable prices;

• the facilitation of a multiplicity of potential suppliers, both from developed and developing countries, which can compete to drive prices down; and

• provision of a wide range of pharmaceutical products to meet an array of health problems.


In implementing the Decision it should also be borne in mind that the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being, as defined in the Constitution of the World Health Organization.9 Progressive realization of that right involves access to health facilities, care, treatment and support, including access to affordable medicines.10

9 For a description of the sources and scope of the right to health, see Report of the Special Rapporteur of the Commission on Human Rights on The right of everyone to the enjoyment of the highest attainable standard of physical and mental health, E/CN.4/2003/58, 13 February 2003, para. 10-36.

10 As interpreted by the Committee on Economic, Social and Cultural Rights (CESCR), access to essential medicines constitutes a core element of the right to the highest attainable standard of health under the International Covenant on Economic, Social and Cultural Rights. See CESCR General Comment 14 (E/C.12/2000/4), para. 43.


This paper proceeds according to the following plan:

The first section details the legal status of the Decision and the circumstances in which the Decision may be used. This section considers amendments to national laws needed to implement the Decision; the circumstances in which the Decision may be invoked; the products covered by the Decision; the countries which may use the Decision; and the purposes for which Members may use the Decision.

The second section considers the steps that an importing country must undertake to employ the Decision. These include required notifications to the TRIPS Council and confirming its intent to issue a compulsory licence.

The third section considers the steps required of an exporting country. These include issuance of a compulsory licence and required notifications by the exporting supplier and the exporting country.

The next section reviews the obligations on an importing country to take measures to prevent diversion of imported goods to other markets once it has employed the system.

A further section discusses the issue of suspension of the system.


A brief concluding section is followed by an annex summarizing the context and steps required to use the system established by the Decision.

 

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