Globalization and Access to Drugs. Perspectives on the WTO/TRIPS Agreement - Health Economics and Drugs Series, No. 007 (Revised)
(1998; 97 pages) [French] [Spanish] View the PDF document
Table of Contents
View the documentAcknowledgements
View the documentAbbreviations and acronyms
View the documentExecutive summary
View the documentIntroduction
Open this folder and view contents1. Brief historical background to the international trading system
Open this folder and view contents2. Reading the TRIPS Agreement from the perspective of access to drugs
Open this folder and view contents3. Conclusions: issues at stake and constraints on access to drugs
View the documentDefinitions and terminology4
Open this folder and view contentsSelected bibliography5
View the documentOther documents in the DAP - Health Economics and Drugs Series
View the documentBack cover

Definitions and terminology4

4 The terms defined in this chapter are marked with an asterisk the first time they appear in the document.


Integration of natural sciences and engineering in order to achieve the application of organisms, cells, parts thereof and molecular analogues for products and services.

Brand name

Name given to a drug by the manufacturer. The use of this name is reserved exclusively to its owner.

Compulsory licence

This term is used when the judicial or administrative authority is allowed by law to grant a licence, without permission from the holder, on various grounds of general interest (absence of working, public health, economic development, and national defence).

Counterfeit goods

Counterfeiting is a form of infringing activity. Counterfeit goods are generally defined as goods involving slavish copying of trademarks.

Counterfeit medicine

According to WHO, a counterfeit medicine is one which is deliberately and fraudulently mislabelled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients, wrong ingredients, without active ingredients, with incorrect quantity of active ingredients or with fake packaging. This definition includes intellectual property and non-intellectual property elements.

Dependent patent

A patent that cannot be exploited without using another patent. When the use of compulsory licences is necessary, it is subject to certain conditions in the TRIPS Agreement:

a) “the invention claimed in the second patent shall involve an important technical advance of considerable economic significance in relation to the invention claimed in the first patent;

b) the owner of the first patent shall be entitled to a cross-licence on reasonable terms to use the invention claimed in the second patent; and

c) the use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent.”

Drug Regulatory Authority

A Drug Regulatory Authority is designated by the State to ensure compliance with regulations applicable to drugs: issuing of marketing authorizations, authorizations of dispensaries, etc.

Essential drugs

Essential drugs are those that satisfy the health care needs of the majority of the population; they should therefore be available at all times in adequate amounts and in the appropriate dosage form. The WHO Model List of essential drugs is intended to be flexible and adaptable to many different situations; exactly which drugs are regarded as essential remains a national responsibility.

Exhaustion of intellectual property rights (see parallel imports)

This is a partial extinction of the right of the patentee - holder of the patent - consisting of the termination of certain of his prerogatives, due to exhaustion of rights. According to this theory, the patentee’s right is exhausted when the product covered by it is put into circulation for the first time, if this has been done with the consent of that right holder. It follows that once the product has been put on the market, the patentee may no longer exercise control over the subsequent circulation of that product.


The General Agreement on Trade in Services constitutes one of the new domains of competence assigned to the WTO. It is compulsory for all Member States and is aimed at liberalizing trade in services. It is likely to have consequences in the field of public health in that it may provide for Member States to open their domestic market to foreign suppliers of hospital and medical services.


The World Trade Organization is the institutional successor to the General Agreement on Tariffs and Trade (GATT). The latter was a very particular institution: the GATT was, in fact, simply a treaty signed in 1947 by 23 nations and not an organization such as the International Monetary Fund or the World Bank, which were established at the same time. The GATT was thus a multilateral instrument whose objective was to promote and regulate the liberalization of international trade through “rounds” of trade negotiations. In 45 years, there have been eight rounds of negotiation under the auspices of the GATT. The first rounds were only concerned with sectoral reductions of customs duties. In the Kennedy Round (1964-1967) and the Tokyo Round (1973-1979), the scope of the negotiations was enlarged to include global reduction of customs duties and non-tariff measures constituting a barrier to trade (dumping, subsidies and government procurement). The last round of negotiations opened in Uruguay in 1986 and ended with the signature of the Final Act in Marrakech in 1994, establishing the new WTO. This Organization has international legal status and henceforth all matters relating to international trade will fall within its jurisdiction. The WTO agreements consist of multilateral agreements that become binding upon Member States when they join the WTO, and plurilateral agreements that are optional.

GATT 1947/GATT 1994

The General Agreement on Tariffs and Trade of 1994 is one of the WTO multilateral agreements. It consists of the original text of the GATT of 1947 as revised and modified during the various rounds of negotiations, including the concessions agreed during the Uruguay Round.

Generic drug

A pharmaceutical product usually intended to be interchangeable with the innovator product, which is usually manufactured without a licence from the innovator company and marketed after the expiry of patent or other exclusivity rights. Generic drugs are marketed either under a non-proprietary or approved name rather than a proprietary or brand name.


Phenomenon arising at the end of the twentieth century characterized by worldwide interpenetration and interdependence of all sectors - economic, political, social, cultural and military. In other words, globalization, as the result of technical and economic evolution, is equivalent to a transformation of society resulting in the negation of territorial frontiers.

Good manufacturing practice for pharmaceutical products

Good manufacturing practice (GMP) is that part of quality assurance which ensures that products are consistently produced and controlled to the quality standards appropriate to their intended use and as required by the marketing authorization (product licence).

INN (international non-proprietary name) or generic name

Common, generic names selected by designated experts to identify new pharmaceutical substances unambiguously. The selection process is based on a procedure and guiding principles adopted by the WHA. They are recommended for worldwide use, destined to be unique and public property (non-proprietary).

Intellectual property

Intellectual property rights are exclusive rights, often temporary, granted by the State for the exploitation of intellectual creations. Intellectual property rights fall into two categories: those rights relating to industrial property (invention patents, industrial designs and models, trademarks, and geographical indications) and those relating to literary and artistic property (copyright). The Agreement on Trade-Related Aspects of Intellectual Property Rights covers the main categories of intellectual property law.


A contract whereby the holder of an industrial property right (patent, trademark, design or model) cedes to a third party, in whole or in part, the enjoyment of the right to its working, free of charge or in return for payment of fees or royalties.

Marketing authorization

An official document issued by the competent drug regulatory authority for the purpose of marketing or free distribution of a product after evaluation for safety, efficacy and quality.

Most-favoured-nation (MFN)

Article 1 of the GATT of 1947 requires Member States to comply with a general obligation to apply most-favoured-nation treatment. According to this Article, “Any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country, shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties”. In other words, it is prohibited to treat products differently on account of their origin. In order to avoid any discrimination, any advantage accorded to one country must also be accorded to all other Members of the GATT.

Multilateral/plurilateral agreements

The new Agreement instituting the WTO consists of multilateral trade agreements that are binding on all WTO Member States and plurilateral trade agreements whose acceptance by Members is optional.

The Multilateral Agreements include the multilateral agreements on trade in goods, the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The agreements on trade in goods comprise the GATT of 1994, the Agreement on Agriculture, the Agreement on the Application of Sanitary and Phytosanitary Measures, the Agreement on Textiles and Clothing, the Agreement on Technical Barriers to Trade, the Agreement on Trade-Related Investment Measures (TRIMs), the Anti-dumping Agreement, the Agreement on Customs Valuation, the Agreement on Pre-shipment Inspection, the Agreement on Rules of Origin, the Agreement on Import Licensing Procedures, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards.

The plurilateral agreements are the Agreement on Trade in Civil Aircraft and the Agreement on Government Procurement.

Parallel imports

Products imported into a country without the authorization of the right holder in that country, which have been put on the market in another country by that person or with his consent. According to the theory of exhaustion of intellectual property rights, the exclusive right of the patent holder to import the protected product is exhausted, and thus ends, when the product is first launched on the market. When a State or group of States applies this principle of exhaustion of intellectual property rights within a given territory, parallel importation is authorized to all residents in the State in question. In a State that does not recognize this principle, however, only the patent holder that has been registered has the right to import the protected product.

Parallel patent

This term is used when an invention is covered by more than one national patent registered by the same person in different countries.


A title granted by the public authorities conferring a temporary monopoly for the exploitation of an invention upon the person who reveals it, furnishes a sufficiently clear and full description of it, and claims this monopoly.


This means that a product or manufacturing process fulfils the necessary conditions for protection by a patent. There are two categories of patents: product patents and process patents.

“Pipeline” protection

This type of protection was supported by the United States of America during the Uruguay Round but ultimately was not included in the TRIPS Agreement. It is a kind of retroactive protection, to the effect that pharmaceuticals already patented in other countries but not yet patented in the “pipeline” country (because its legislation did not grant patents for pharmaceuticals), nor marketed in that country, may be claimed for protection as such as soon as the Agreement comes into force. However, the TRIPS Agreement imposes protection only on inventions still meeting the criteria for patentability (notably because they have not yet been disclosed) on the date of entry into force of the Agreement.


Pirated goods are goods that violate copyright and related rights. Publishers and producers of records, films and recorded tapes are often the victims of breaches of copyright. The computer software industry is particularly affected.

Research & Development (R&D)

The activity of devoting money and energy to researching a new technology in any field, and then developing the product or process obtained. In the pharmaceutical field, the costs of R&D are particularly high. The invention and development of a new drug requires considerable investment, hence the demand from the pharmaceutical industry for patents to be issued for all new inventions, with a view to recovery of the funds invested in R&D.

Reverse engineering

A practice for discovering the manufacturing process of a product starting from the finished product. This practice has often been used to copy original drugs in countries that do not grant patents for pharmaceutical products.

Settlement of international trade disputes

The dispute settlement mechanism allows countries to challenge the measures taken by their trading partners and obtain a ruling on the compatibility of these measures with the provisions of the WTO agreements. The “Understanding on Rules and Procedures Governing the Settlement of Disputes”, that is part of the Agreement establishing the WTO, instituted the Dispute Settlement Body (DSB), which is competent to deal with any dispute arising in regard to any of the multilateral or plurilateral WTO agreements.

Tariff/non-tariff barriers to trade

The tariff measures constituting a barrier to trade are customs duties, taxes imposed on goods entering a territory other than their territory of origin. The non-tariff measures constituting a barrier to trade are all the other regulatory or legislative measures that result in the distortion of competition in international trade. These include: commercial dumping, technical barriers to trade, government procurement, subsidies or customs valuations.

Technical barriers to trade (TBT)

The Agreement on Technical Barriers to Trade is one of the multilateral agreements on trade in goods and therefore binding on all Members. It expands and spells out the TBT Agreement concluded at the Tokyo Round. It aims to ensure that technical regulations and standards, and testing and certification procedures, do not create unnecessary barriers to trade. Nevertheless, it recognizes that a country has the right to take measures, for example, to protect the health and life of humans and animals and for the preservation of plant life or protection of the environment, at the levels it deems appropriate, and that nothing can prevent it from taking the necessary measures to ensure respect for these levels of protection. Countries are thus encouraged to have recourse to international standards where they are appropriate, and in particular to the WHO standards of quality applicable to pharmaceutical, biological and food products; but they are not required to modify their levels of protection following standardization.

Term of protection

This is the duration of the lifetime of a patent, in other words, the time during which the title holder to the invention may enjoy a monopoly for its exploitation. The TRIPS Agreement imposes a minimum term of 20 years for all product and process patents, measured from the date on which the patent application was filed.

Trademark (Article 15 of the TRIPS Agreement)

Any sign or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, figurative elements and combination of colours as well as any combination of such signs, shall be eligible for registration as trademarks. Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use. Members may require, as a condition of registration, that signs be visually perceptible.

Transition period

In the TRIPS Agreement, certain countries are granted periods of transition, adapted to their levels of development, constituting waivers to the time limits normally stipulated for compliance with the Agreement. Whereas all WTO Members are entitled to a one-year transition period, developing countries and, subject to certain conditions, the former socialist republics are granted four extra years to bring their legislation into conformity with the Agreement. Likewise, the least-developed countries are accorded an extra ten years to start applying the provisions of the Agreement, with a possibility of extension.


The Agreement on Trade-Related Investment Measures recognizes that certain measures may have the effect of restricting or distorting trade. It provides that no Contracting Party may apply trade-related investment measures (TRIMs) that are not compatible with Article III (national treatment) and Article XI (general elimination of quantitative restrictions) of the General Agreement. To this end, an indicative list of TRIMs agreed to be incompatible with these Articles is annexed to the Agreement. This list includes measures requiring an enterprise to buy a certain volume or a certain value of locally produced goods (provisions relating to the content of elements of local origin) or which limit the volume or value of the imports this enterprise may purchase or use to an amount linked with the volume or value of the local products it exports (prescriptions relating to the balance of trade). The Agreement provides for compulsory notification of all TRIMs that do not comply and their elimination within two years for developed countries, five years for developing countries and seven years for the least-developed countries.


The Agreement on Trade-Related Aspects of Intellectual Property Rights covers a new field in multilateral international trade law. It was proposed that this subject should be included in the multilateral trade negotiations of the Uruguay Round in an attempt to remedy problems of international piracy and infringement of intellectual property rights. The Agreement establishes minimum standards of protection for each category of rights. These standards should be integrated into the national legislation of all WTO Members, and should be applied in accordance with the principles of most-favoured-nation treatment and national treatment. They subsume and extend to all WTO Members the substantive obligations of the main treaties administered by WIPO, i.e. the Bern Convention for the Protection of Copyright and the Paris Convention for the Protection of Intellectual Property, with the addition of other obligations when necessary to complement the scope of these Conventions. The TRIPS Agreement, as an entity in the block of multilateral agreements, binds the obtaining and maintenance of customs benefits in the framework of WTO to respect for intellectual property rights by the State in question. It is the agreement in the Final Act of the Uruguay Round that could have the most implications for the production of and access to drugs, particularly in developing countries.

Unfair competition

This is defined in the TRIPS Agreement as any act of competition contrary to honest trade practices, leaving it to the authorities in each country to define the concept of commercial honesty. More generally, it is defined as wrongful actions committed in professional practice, of a nature such as to incur the civil liability of those committing them. Such actions would be likely to attract clients or turn them away from a competitor in a wrongful manner.

Uruguay Round

“Rounds” of negotiation were instituted when GATT was established. The GATT agreement itself results from the first round of negotiations, since the objective in 1947 was to get States to negotiate in the domain of international trade with a view to granting mutual trade concessions. When the GATT became institutionalized, it was decided to keep the idea of rounds of multilateral trade negotiations (MTN). Thus there have been in succession the Geneva, Annecy and Torquay Rounds, followed by the better known Dillon Round, Kennedy Round, Tokyo Round and Uruguay Round. It was the round that lasted longest (1986-1994) and also the most ambitious, being the origin of the establishment of the WTO and a string of multilateral agreements.

WHO Certification Scheme

The WHO Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce guarantees, through the issue of a WHO certificate, the quality of pharmaceutical products entering international commerce. It is a simple administrative procedure that enables importing countries to obtain information on whether a product has been authorized to be placed on the market in the exporting country, and assurance that the manufacturer has been found to comply with WHO standards of good manufacturing practice. This system is particularly useful for countries with limited capacity for quality control of drugs.


The World Intellectual Property Organization was set up in 1970 to manage the protection and regulation of intellectual property rights. It replaced the Union for the Protection of Intellectual Property, an association of States with permanent independent bodies established by the Paris and Bern Conventions. In 1996, WIPO had 140 Member States and was administering 18 international conventions, the most important of which are the Paris Convention on intellectual property (1883 - 114 Members), the Bern Convention on copyright (1886 - 102 Members), the Madrid Agreement on the international registration of marks (1891 - 37 Members), the Patent Cooperation Treaty (1970 - 68 Members), the Budapest Treaty on the international recognition of the deposit of micro-organisms (1977 - 26 Members) and the International Union for the Protection of New Plant Varieties (UPOV-1961 - 24 Members). Since the existing conventions in the field of intellectual property do not provide for any system of sanctions for non-compliance, it was proposed in the WTO negotiations to introduce the obligation to ensure minimal protection of intellectual property rights, and to make compliance a condition for the granting of customs concessions. The TRIPS Agreement will coexist with the earlier conventions administered by WIPO, without replacing them.

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