EUROPEAN PARLIAMENT TRIPS AMENDMENT VOTE POSTPONED ONCE AGAIN

The European Parliament's international trade committee on 12 September once again prevented the ratification of a controversial amendment to WTO intellectual property rules aimed at easing poor countries' access to patented drugs. It cited a continuing failure by the EU's 27 member states to guarantee that they will help developing nations manufacture and import affordable medicines.

In July, parliament members from across the political spectrum passed a resolution making assent to the amendment conditional on EU member governments promising political and financial support for developing country public health programmes (see BRIDGES Weekly, 18 July 2007). Foremost among the demands was a commitment not to oppose developing country governments that choose to take advantage of flexibilities in the WTO Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) in order to produce or import generic copies of patented drugs for public health purposes.

However, the European Parliament remains unsatisfied with the response from the EU Council, made up of the union's 27 national governments. "We must sort out the issue of flexibilities in a joint declaration of the European Parliament and Council," said trade committee rapporteur Gianluca Susta (Alliance of Liberals and Democrats for Europe, Italy) after the recent meeting. Under EU procedures, the European Parliament must assent to the potential amendment before each of the member states can ratify it.

WTO Members agreed to the TRIPS amendment in late 2005. Only nine countries have ratified it so far - far short of the 100 or so necessary for it to enter into force on schedule in December (see BRIDGES Weekly, 27 June 2007).

The amendment makes permanent a 2003 waiver setting out the conditions under which it would be legal for Members to issue compulsory licences for the production and export of cheap generic copies of patented medicines to poor countries unable to manufacture drugs. Echoing civil society critics such as Médecins sans Frontières (MSF), several members of European Parliament (MEPs) have complained these conditions are unduly onerous, making the proposed amendment difficult to use.

The European Parliament's July resolution said that ratifying the TRIPS amendment "represents just part of the solution to the problem of access to medicines and public health," stressing that "other measures to improve healthcare and infrastructure are equally indispensable."

Portugal, which currently holds the rotating presidency of the Council, responded to the parliament's concerns in an August letter reiterating EU member states' support for public health-related flexibilities in WTO intellectual property rules, specifically naming the 2001 Doha Declaration on the TRIPS Agreement and Public Health. Manuel Lobo Antunes, Portugal's secretary of state for European affairs, wrote "the Council believes that this amendment is the best solution at the moment to attempt to solve the specific issue of facilitating exports to poor developing countries that do not have the production capacity for generic drugs." Referring to the European Parliament's demands, he pointed to existing programmes by EU members to support research and development and build drug manufacturing capacity in developing countries.

The parliament's trade committee, however, remains unimpressed. The disagreement is one of several discordant notes sounded in recent months by different levels of government in the EU on the broader connection between TRIPS flexibilities and the pursuit of public health goals.

Most notable was a sharp exchange between EU Trade Commissioner Peter Mandelson and Thai Health Minister Mongkol Na Songkhla over Thailand's decision to issue compulsory licences suspending the patents on two HIV/AIDS drugs and one heart disease treatment (see BRIDGES Weekly, 31 January 2007). Lauded by public health advocates, the move was criticised by industry groups, though its legality under WTO rules for compulsory licensing was rarely disputed.

In his letter, dated 10 July, Mandelson expressed concern that "the Thai government may be taking a new approach on access to medicines." Pointing to the recent compulsory licences and a statement by Bangkok saying that drug companies "should offer their drugs for no more than 5 percent above the generic cost," he argued that a "systematic policy of applying compulsory licences" would "be detrimental to the patent system", risked scaring away pharmaceutical investment, and did not appear to be justified by TRIPS rules and associated flexibilities.

Moreover, the EU trade chief said that the Thai government should explore "other means" to boost access to essential medicine "before resorting to such exceptional measures." On behalf of the EU, he encouraged the Thai government to seek "direct discussions" with the patent-holding companies, particularly with France's Sanofi-Aventis, the makers of Plavix, a blood thinner used to treat a non-communicable heart disease. Mongkol countered that the 5 percent premium applied only to the three medicines for which compulsory licences had been issued to secure generics for government health programmes. He emphasised that it was not applicable to the private market for the three drugs or to any drugs not under compulsory licence. Nor was the premium a criterion used to determine whether to issue compulsory licences, he said, asking Mandelson for evidence in support of his allegations that this was the case. Bangkok has maintained that it had tried to negotiate lower prices with the companies in question - even though not required to do so by WTO rules - but to little avail. A March report by the Thai government concluded that such discussions were more likely to be successful under threat of a compulsory licence (see BRIDGES Weekly, 14 March 2007). In his letter, Mongkol pointed to the European Parliament's July resolution reaffirming countries' right to use TRIPS flexibilities.

Noting that EU member countries had often made use of compulsory licences, the Thai minister also asked Mandelson to demonstrate how they had been isolated from the global biotechnology investment community. The EU trade chief replied to Mongkol last week, but failed to provide any such examples. He did express satisfaction that Thailand was not pursuing a systematic compulsory licence policy, and reiterated his call for negotiations with the patent-holders.

When Mandelson faced the European Parliament's trade committee on 12 September, his correspondence with the Thai minister faced heavy criticism for appearing to discourage compulsory licensing, particularly from Ignasi Guardans Cambo, a Spanish liberal MEP. One source said that committee members were only "partially satisfied" with the commissioner's explanation that his letter had been misinterpreted.

MSF and Oxfam noted that Mandelson's message to Thailand on compulsory licensing was very different from that set out by the European Parliament. "We are surprised that your intervention made in the name of the European Union comes at the very moment the European Parliament is requesting the Council and the Commission to find ways to solve issues around access to medicines," they wrote in a letter to the trade commissioner.

The parliamentary trade committee's next opportunity to approve the TRIPS amendment will be at its 8-9 October meeting. If committee members are satisfied by then with EU members' response to their demands, their assent would set up a parliament-wide vote two weeks later.

ICTSD reporting.