WTO, WHO and WIPO Vow Cooperation on Access to Medicines, but Challenges Remain

21 July 2010

"Global public health is a complex puzzle and getting it right is a teasing challenge, involving effective use of the full set of applicable policy tools," Pascal Lamy, Director-General of the World Trade Organisation (WTO), said Friday when opening a one-day technical symposium on access to medicines in the developing world.

The meeting - which was hosted by the WTO and organised jointly by the WTO, the World Health Organization (WHO) and the World Intellectual Property Organisation (WIPO) - was meant to help international and regional agencies that purchase drugs share their experiences and learn more about the procurement of medicines. Speakers included the heads and other officials from all three of the host organisations in addition to government officials, representatives of the private sector and civil society.

The symposium "should be seen as part of the ongoing trilateral cooperation between the WHO, WIPO and WTO" explained Lamy. "No connection is planned or intended between this process and the ongoing policy and legal debates within the WTO about the scope and effect of TRIPS flexibilities, especially the work of the TRIPS Council," he added, referring to the WTO's Council on Trade-Related Aspects of Intellectual Property Rights. Some developing countries fear that the flexibilities they enjoy under the WTO's TRIPS Agreement could be undermined by decisions and agreements taken outside the global trade body.

Margaret Chan, Director-General of the WHO, acknowledged that the debates on access to medicines "are often clouded by...suspicions that the rules governing international trade in pharmaceutical products are rigged to favour the rich and powerful." But, she continued, "people should not be denied access to life-saving or health-promoting medicines for unfair reasons, including those with economic causes."

Francis Gurry, Director-General of WIPO stressed the need for a balance between providing incentives for innovation and sharing the benefits that result. "Without health, everything in life is without value," he said.

Drugs Procurement and Pricing

The first part of the meeting focused on the procurement and pricing of medicines. According to the WHO, drug procurement can be broken down into four component parts: price, selection, financing and systems of distribution and quality control. Intellectual property (IP) intersects with procurement on the issue of price, but other factors also come into play in determining a medicine's cost, some participants cautioned. Intellectual property is only one component of price, they stressed, and price is only one factor in procurement.

Rebecca Stevens of the International Federation of Pharmaceutical Manufacturers Association (Novartis) noted that so-called "stock outs" - when agencies run out of medicines - are still a major issue. Long tender processes, a lack of standardised tender procedures, under-producing suppliers, and insufficient supply chains are some of the reasons for the shortages, she said.

Several other speakers noted the significant price reductions available for procurement agencies when generics are used in place of originator drugs. Officials from the WHO and elsewhere noted that drug prices had been brought down through generic substitution and through developing countries' use of the flexibilities that are outlined in the WTO's TRIPS Agreement, such as the right to issue compulsory licenses. A representative from UNAIDS added that countries can only take advantage of TRIPS flexibilities if they implement the necessary legislation. Health Action International (HAI) warned developing countries against accepting so-called TRIPS-plus provisions in regional and bilateral free trade agreements on the grounds that such measures could limit the availability of TRIPS flexibilities.

Publishing the prices, availability and quality of drugs on the market can increase competition and lower prices, noted several speakers from purchasing agencies. Representatives from the WHO and the Global Fund to Fight AIDS, Tuberculosis and Malaria mentioned that their respective websites provide comparative information on procurement and pricing. Countries should use the information to strengthen negotiation positions to obtain lower prices from suppliers, they said.

Antony Taubman, Intellectual Property Director at the WTO, noted that average tariffs on pharmaceuticals in developing countries are low; least developed countries (LDCs) often apply zero tariffs, he said. He noted, however, that some developing countries maintain average tariff rates of up to 14 percent and tariff peaks up to 24 percent. These tariffs are part of the industrial goods negotiations in the WTO's ongoing Doha Round trade talks.

Challenges related to intellectual property rights

A speaker from UNICEF stressed that when the organisation is looking to purchase drugs, it has sometimes found it difficult to determine the patent status of particular medicines because many countries do not have easily accessible databases. Konji Sebati, from WIPO, promised to look into how WIPO could better assist procurement agencies in accessing patent information. She also said that WIPO has an essential role to play in facilitating information on pharmaceutical patents and patent laws.

Representatives from the International Generic Pharmaceutical Alliance said that such databases would be welcome, but stressed that patents remain a huge barrier for medicines procurement. Agencies are faced with huge challenges, they said, as many pharmaceuticals are covered by several patents, some with questionable legal validity. Moreover the scope of patents varies in different countries, they stressed.

Richard Laing from WHO responded to a question from the press about the drive towards stronger enforcement of intellectual property rights in the context of the Anti-Counterfeiting Trade Agreement (ACTA), a potential deal on IP enforcement that is now under negotiation among a group of mainly developed countries. "There is considerable grounds for concerns about ACTA, particularly because of the (recent) seizures of generic drugs in Europe," Laing said. "The public release of the ACTA text is welcome...ultimately...the devil is in the details."

Several other officials from UNITAID, International Generic Pharmaceutical Alliance, UNICEF and Medecins Sans Frontieres (MSF) also noted that it was increasingly unsafe for them to store generics destined for developing countries in Europe. Brazil and India launched a WTO dispute against the EU over the seizures of generic drugs in transit in May 2010.

Laing also noted that the Kenyan anti-counterfeiting law represented a disjunction between access to health and enforcement. MSF expressed concern that their imports of generics to Kenya under this legislation risked being treated as counterfeit.

A representative from the mission of Bangladesh asked the WTO about how the special TRIPS waiver on pharmaceuticals had benefitted the LDCs and about what might happen when the waiver expires in 2016. The concern about the upcoming expiration was echoed by MSF and UNAIDS.

Antony Taubman of the WTO responded that it is difficult to measure how a waiver benefits LDCs because by its very character the measure effectively represents a right to maintain the status quo. Thus, no immediate impact can be felt from the decision to apply the waiver as such. But the waiver decision also set up a process to enable LDCs to identify their individual priority needs for TRIPS implementation, he said, and to facilitate the coordination of technical cooperation to meet those needs. This was an opportunity for LDCs to pursue public health objectives in the context of implementing TRIPS.

Several delegates also said that the WTO's Paragraph 6 system has not worked. The system - which is named after the relevant section of the Doha Declaration on Public Health - is based on a waiver that removes a requirement that generic drugs that are produced under compulsory license should be used mainly in the domestic market. It is intended to help developing countries gain affordable access to critical medicines. Since it was enacted in 2003, the system has been used only once, for a shipment of HIV/AIDS drugs from Canada to Rwanda in 2008.

UNICEF called for a standardised format for notifying use of TRIPS flexibilities and mentioned that the WTO could be the forum for receiving such notifications. This would enable purchasing agencies to better judge whether, for example, a compulsory license exists on a particular drug and thus whether generics can be used in a project.

While positive atmosphere at the meeting reflected a willingness for greater engagement and cooperation by the three organisations, it remains to be seen where the cooperation between will go next and what practical outcomes might result.

ICTSD reporting.

This article is published under
21 July 2010
The heads of state of Argentina and China met in Beijing last week for a series of talks, only to find themselves skirting the issue of China's recent ban on imports of Argentine soybean oil, a...
21 July 2010
Trading at prices unheard of in the last thirty years, cocoa is drawing the attention of hedge funds and civil society alike. Armajaro, a London-based commodities fund, recently bought futures...