TRIPS Council: Debate over Effectiveness of System for Access to Medicine

3 November 2010

A rarely-used system intended to help poor countries import generic versions of patent-protected drugs was at the centre of discussions at the WTO last week, as members debated whether the system needed modification to make it more usable.

In the seven years since its creation, the mechanism has been used precisely once: to cover two shipments of an HIV/AIDS drug from Canada to Rwanda in 2008 and 2009. During the 26-27 October meeting of the WTO Council for Trade-related Aspects of Intellectual Property Rights (TRIPS), India, Brazil, China, South Africa, and other developing countries argued that this infrequency implied that the system must be too complicated to use, according to sources. Canada, backed by other developed countries such as the US, Australia, Japan and Switzerland, suggested that the system was fine, and that governments had not used it because they were able to negotiate better drug prices with the patent-holders, or import cheap generics from countries where the drugs were not under patent.

The system in question was first created by a 2003 decision establishing the conditions under which WTO members are allowed to issue compulsory licences to manufacture and export cheap generic copies of patented drugs to developing countries that lack the capacity to make the medicines they need. That '30 August decision' was widely criticised, particularly by public health campaigners, for containing administrative conditions so complex as to render the system nearly impossible to use. Nevertheless, WTO members in late 2005 agreed to convert the temporary 30 August decision - also called the ‘Paragraph 6' system after the relevant section of the 2001 Doha Declaration on TRIPS and Public Health - into a permanent amendment to the TRIPS Agreement. (The provisional amendment has yet to enter into force, since it has only been ratified thus far by 57 members, well short of the 101 ratifications required for the amendment to take effect.)

Generic competition has helped drive down prices for older HIV/AIDS drugs by over 99 percent in some cases, making it vastly more affordable to scale up treatment, a point repeatedly made by public health groups and acknowledged by some donor government officials.

Although the TRIPS Council has examined the so-called ‘Paragraph 6' system annually since 2003, growing dissatisfaction with its functioning over the past year prompted WTO members to examine the issue at length during the recent session.

Much of the discussion focused on Canada's experience using its implementing legislation for the Paragraph 6 system, called CAMR (Canada's Access to Medicines Regime).

The Canadian delegate argued that Ottawa's legislation, and the Paragraph 6 system, were "efficient, effective and timely - if a need is identified."

He argued that the main reason that no drug shipments took place until fall 2008 was because it was not until July 2007 that Rwanda formally notified the WTO of its desire to import the HIV/AIDS drug TriAvir, a combination made by the Canadian generics firm Apotex of drugs patented by GlaxoSmithKline, Boehringer Ingelheim, and Shire.

In 2007, Apotex had already secured regulatory approval from Canadian health authorities for the drug - in six months rather than the normal twelve, the delegate said, attributing the speed to the CAMR. (Apotex had developed the fixed-dose combination and sought regulatory approval as part of an ultimately abortive attempt in coordination with the medical aid group Médecins Sans Frontières to use the 30 August decision. That initiative failed in part because no countries were willing at the time to come forward as importers, and also because in the interim, an off-patent Indian generic equivalent came onto the market.)

According to the Canadian delegate, once Rwanda formally signalled its intention to use the Paragraph 6 system, it took Apotex only 15 days in September 2007 to receive a compulsory license from the Canadian patent authorities. An eight-month-long public tender process in Rwanda then ensued, which Apotex won by beating out an Indian competitor on price (eventually selling at below cost). From May until September 2008, Apotex manufactured TriAvir. In September 2008, Apotex shipped  6,785,000 tablets to Rwanda. A year later, it sent a shipment of 7,628,000 tablets to Rwanda, completing the country's order.

"CAMR was a small part of the more than 2 years between the WTO notification by Rwanda and the final shipment by Apotex," the official said. "The challenges and delays in Apotex's export of medicines to Rwanda were separate from CAMR.  CAMR worked efficiently, effectively and in a timely fashion." While it took "3.5 years for Apotex to develop the drug, identify a recipient country, secure a supply contract and then manufacture it," he added, "just over two months of that time was taken up by CAMR procedures."

In Canada, public health groups have been calling for the CAMR to be amended to include a ‘one-license' solution,' that would lower costs for would-be generic manufacturers by relieving them of the obligation to negotiate separately with patent-holders for each different purchasing country and order. However, a bill to amend the CAMR accordingly has become stuck in parliament amidst procedural obstacles and substantive opposition from both the Conservative government and members of the leading opposition Liberal party.

Rwanda did not intervene at the WTO meeting; sources were not able to confirm whether delegates from the African country were even present at the TRIPS Council session.

India reported a much less positive experience with the Paragraph 6 system. The Indian delegate said that a least-developed country lacking adequate drug manufacturing capacity (believed to be Nepal) had sought to use the system to import three patented medicines from India, but ultimately gave up, dissuaded by the various notification, packaging, labeling, and website tracking requirements set out in the 30 August decision.

The delegate reminded members that while India was the source of the vast majority of donor-funded HIV/AIDS medication, it has been required by the TRIPS Agreement to provide patent protection to pharmaceutical products since 2005. Thus, while pre-2005 drugs were for the most part off-patent in India and thus easily available for generic production, post-2005 drugs - which include the newer, more expensive HIV/AIDS treatment regimes - are patent-protected there.

A representative from the World Health Organization also made a distinction between pre- and post-2005 drugs. While refraining from expressing a view on whether or not the Paragraph 6 system was overly cumbersome, the official said that the issue of access to medicines had to do with more than simply intellectual property. However, he did note that competition from generics had cut prices of "first line antiretroviral [HIV/AIDS] medicines" dramatically over the past decade, enabling a massive increase in the number of patients receiving treatment. It may become necessary to use the Paragraph 6 solution to acquire post-2005 medicines at affordable prices in the future, he said.

A number of governments described their implementing legislation for the Paragraph 6 system and programmes for access to medicine (including alternatives to compulsory licensing, such as tiered pricing schemes) during the meeting.

Martin Glass (Hong Kong), who chairs the TRIPS Council, said that the Paragraph 6 system issue would be on the group's agenda next year. Several developing countries have been calling for workshop on the issue, open to participation by pharmaceutical companies, non-governmental organizations and others.

ICTSD reporting; "Amendments water down access-to-medicine bill," GLOBE AND MAIL, 2 November 2010.

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