Different approaches may be followed in order to address the problem posed by lack of or insufficient manufacturing capacity in pharmaceuticals. The main options include:
(a) To amend75 Article 31 (f), in order to allow for the granting of a compulsory licence which is not “predominantly” for the domestic market.
75 In the absence of consensus, an amendment to a WTO Multilateral Trade Agreement must be approved by a two-thirds majority, but it only becomes binding on Members that accepted it. An amendment may also be adopted by a three-fourths majority as binding on all Members, but any Member which has not accepted it shall be free to withdraw from the WTO or to remain as a Member with the consent of the Ministerial Conference (Article X.1 and 2 of the Agreement Establishing the WTO).
(b) To provide for a specific exception for exports under Article 30 of the TRIPS Agreement76, possibly by means of an authoritative interpretation77;
76 See the letter of 28 January 2002 sent to the Members of the Council for TRIPS by Consumer Project on Technology, Médecins Sans Frontières, Third World Network, Oxfam, Health Gap Coalition and Essential Action.
77 An authoritative interpretation needs to be adopted by a three-fourths majority of Members, and should not be used “in a manner that would undermine the amendments provision of article X” (article IX.2 of the WTO Agreement).
(c) To agree on a moratorium with regard to complaints against countries that export some medicines to countries in need, under certain conditions78.
78 Proposed by the USA delegation at the March 2002 session of the Council for TRIPS.
(d) To declare exports to a country eligible under paragraph 6 as non-judicable under the WTO rules79;
79 Unlike the moratorium, this solution would be permanent. See, e.g. Attaran, 2002.
(e) To allow a Member to issue a compulsory licence to a manufacturer in another country, provided the government of that other country recognized the licence (which it would not be obliged to do under the Agreement)80, and provided that all the goods manufactured under the licence were exported to the country granting the licence81.
80 The effective application of this option faces jurisdictional barriers. An authority in a given country can only grant a compulsory licence valid in that country. There is no obligation on other countries to admit extraterritorial effects of such a grant. This could be done, however, under the concept of “Comity See”, e.g., Abbott, 2002b, p. 29.
81 See IP/C/W/280.
Other options include the transfer of technology in order to create manufacturing capacity in the country in need82, the creation of a “regional pharmaceutical supply center”83, and the establishment of “pharmaceutical production export zones”84.
82 According to the statement by Kenya on behalf of developing countries at the March 2002 session of the Council for TRIPS, “any expeditious solution to address the problem acknowledged in Paragraph 6 should not detract the TRIPS Council from the need to consider measures that support the acquisition of all necessary technology and the building of a sound technological base including in respect of medical technology; this is the proven sustainable way to address the public health and public policy concerns of developing countries and least developed countries”. This would be, however, a long-term solution and not an “expeditious” solution as envisaged under paragraph 6.
83 See Reichman, 2002.
84 See, e.g., Abbott, 2002b.
Some of the options mentioned above have been examined at the session of the Council for TRIPS held in March 2002 (see Box 2).
Box 2
Proposals relating to implementation of Paragraph 6 discussed at the Council for TRIPS (March 2002)
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The EC and their Member States submitted two possible options to address the paragraph 6 problem85:
1) an amendment to Article 31 of the TRIPS Agreement in order to carve out an exception to Article 31 (f) for exports under compulsory licences, under certain conditions, of products needed to combat serious public health problems; or
2) an interpretation of the limited exceptions clause of Article 30 of the TRIPS Agreement in a way to allow production for export, to certain countries and under certain conditions, of products needed to combat serious public health problems;
Option (1) would be subject to three conditions: criteria ensuring that importing countries actually face serious public health problems, safeguards against re-exportation of the cut-price generics, particularly to rich countries, and reporting requirements that would inform trading partners of such action.
Option (2) would be subject to two minimum conditions: the entirety of the product must be exported to the country with the public health problem, and re-export from the importing country would be prohibited86.
3) The USA proposed a moratorium whereby WTO Members would agree not to bring a WTO complaint against countries that export some medicines to countries in need, so long as certain other conditions are met87.
On behalf of the African Group, Brazil, Cuba, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Malaysia, Sri Lanka and Thailand, Kenya made a statement suggesting, as possible options, an amendment to Article 31 in order to eliminate paragraph “f”, or to develop an authoritative interpretation that would recognize the right of Members to allow the production without the consent of the patent holder to address public health needs in another country, under Article 30 of the TRIPS Agreement.
85 See IP/C/W/339, 4 March 2002.
86 In addition, the EC and their Member States indicated that the Article 30 exception should conform with other TRIPS provisions, in particular Article 27.1.
87 According to the USA submission, any solution should only apply to epidemics referred to in the Doha Declaration - HIV/AIDS, tuberculosis and malaria - and only to countries with insufficient or no pharmaceutical manufacturing capability. The USA also questioned whether commercial entities should be allowed to produce under such licences. See IP/C/W/340, 14 March 2002.
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It is beyond the remit of this study to examine thoroughly the merits of the different options mentioned above. In the light of the previous analysis, however, some of the advantages and disadvantages of the proposals described in Box 1 are considered in more detail.
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