WTO Members Make Permanent IP Rule Upgrade to Improve Access to Medicines

30 January 2017

A long-awaited revision to the World Trade Organization’s intellectual property (IP) rules was made permanent on Monday 23 January, formalising an existing waiver aimed at allowing the organisation’s poorest members to have easier access to cheaper, generic versions of medicines produced abroad.

At issue in the amendment, known also as the TRIPS protocol, is the topic of compulsory licensing – in other words, when a government allows another actor to make a version of a patented good even without the right holder’s permission – with regards to the production of generic drugs. This is addressed under Article 31 of the TRIPS Agreement.

Under WTO rules, this compulsory licensing is meant for the production of that good to serve the home market, rather than for export, along with being subject to other conditions. However, the TRIPS protocol is meant to ensure that poorer countries which may lack the capabilities to produce their own medicines themselves can buy these generics from foreign markets, rather than being limited only to what can be manufactured domestically.

The protocol was finally confirmed after enough of the global trade body’s members had submitted their ratifications. Under WTO rules, this threshold requires two-thirds of the organisation’s membership.

Over a decade in the making

The process to add this amendment to the WTO’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) dates back well over a decade.

When WTO members adopted the Doha Declaration on the TRIPS Agreement and Public Health in 2001, they directed the organisation to help address the problems that “WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face” when trying to use the compulsory licensing described under global trade rules.

This led to the development of a waiver which was put in place from 2003, known as the “Paragraph 6 decision” after this section of the Doha Declaration. The global trade body’s members have been working to transform this waiver into the above-mentioned permanent amendment since late 2005.


Health benefits, legal clarity

The effort to transform the 2003 waiver and subsequent 2005 decision into a permanent change to WTO rules has several benefits, proponents say, including providing a level of legal clarity and certainty for all parties involved. Having ensured the option of buying these generics can make it easier to buy affordable drugs that treat a host of diseases that especially afflict some developing nations, from HIV/AIDs to malaria.

“It gives legal certainty that generic medicines can be exported at reasonable prices to satisfy the needs of countries with no pharmaceutical production capacity, or those with limited capacity,” said WTO Director-General Roberto Azevêdo in welcoming the news.

Public health officials similarly lauded the development as a positive step both for tackling disease and also for affirming the value that trade policy can have in addressing public policy priorities, when crafted appropriately.

“[The amendment] reinforces the importance of health in the formulation of international trade medicines,” said World Health Organization (WHO) Director-General Margaret Chan in a video statement.

The WHO chief noted, however, that much more needs to be done in this field, stating that helping developing countries make the most use out of the TRIPS Agreement’s built-in flexibilities is just one part of a much larger puzzle to solve.

“We are a long way from reaching global equity in access to essential medicines, especially at a time when the costs of some new treatments are unsustainable, even in the richest countries in the world,” said Chan.

According to a 30 November 2015 decision adopted by the General Council, the period of time for the remaining WTO members to adopt this protocol will continue through the end of this year, unless this timeframe is extended during the upcoming ministerial conference.

A report issued last year by the UN Secretary-General’s High-Level Panel on Access to Medicines had called for WTO members to adopt the waiver and permanent amendment. It also said they should “revise the paragraph 6 decision in order to find a solution that enables a swift and expedient export of pharmaceutical products produced under compulsory license” and warned against any industry or government pressure that might make it harder for developing countries to use TRIPS flexibilities.

The report was commissioned under Ban Ki-moon, who was Secretary-General at the time. (See Bridges Weekly, 22 September 2016)

TFA news forthcoming?

Also on the horizon for the WTO is the expected entry into force of the Trade Facilitation Agreement (TFA). While the TRIPS amendment marks the first time that the WTO’s rules have been officially changed, the TFA marks the first-ever global trade agreement reached since the Geneva-based organisation opened its doors in 1995.

The TFA, which was agreed at the organisation’s 2013 Bali ministerial conference, is now two ratifications shy of reaching the two-thirds ratification threshold. To date, 108 ratifications have been submitted.

The accord aims to make it easier for goods to cross borders, such as by improving cooperation between customs authorities and otherwise easing burdensome border procedures. Like the TRIPS amendment, the TFA also has a development-related component, specifically in that developing country members can choose which provisions they put into place straight away, as opposed to which ones require technical assistance and/or a transition period.

In remarks to the International Forum for National Trade Facilitation Committees, the WTO Director-General highlighted the potentially “transformative” nature of the agreement’s benefits as members move into the implementation stage.

“Our research shows that the manner of implementation is key. The more extensive and rapid the implementation is, the greater the benefits will be for everyone,” said Azevêdo.

ICTSD reporting.

This article first appeared in Bridges Weekly, 26 January 2017.

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