TACD WORKSHOP: The Impact Of Intellectual Property Rules On Consumers Of Health Care Service, 31 October 2002

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Oct. 31, 2002

TACD WORKSHOP: The Impact Of Intellectual Property Rules On Consumers Of Health Care Services
Panel 4: WTO Negotiations on Paragraph 6 of the Doha Declaration:
Rules for the Export of Health Care Technologies with the Permission of Patent Owners
CHART ON THE STATUS OF MAJOR DOHA PROPOSALS
Professor Brook K. Baker, Health GAP (Oct. 31, 2002)

Conditionalities: U.S. E.U. South Africa, India, Brazil, and others WTO

Covered Diseases References “grave” public health problems, esp. HIV/AIDS, TB, and malaria Emphasizes HIV/AIDS, TB, and malaria. No limit on scope of diseases covered Reference to public health problems referenced in Paragraph 1 of the Doha Declaration without clarity re Big Three or all diseases.

Products Pharmaceutical products and processes only. Pharmaceutical products and processes only. All medicines and vaccines, products used to administer medicines and vaccines, and diagnostic products Pharmaceutical products and processes; further discussion on diagnostics

Importing Countries 1. All least developed countries.
2. Other developing countries according to unspecified criteria involving levels of income and development.
3. Limited pharmaceutical capacity to produce any medicines.
4. Explicitly covers countries without patents in force.
1. Developing countries with no/insufficient manufacturing capacity (suggesting stringent criteria for eligibility). 1. No a priori exclusion. Each member may determine if it has insufficient manufacturing capacity with respect to a particular product. Specifically, no criteria based on level of national income or of economic development.
2. Members may opt out.
1. Per se inclusion - Least Developed Countries;
2. Per se exclusion - Non-transitional, developed countries;
3. Based on objective criteria of a lack or insufficiency of manufacturing capacity, certain developing country members.
4. Questionable eligibility of transitional developing countries and high-income developing countries.

Exporting Countries Production and export by developing countries only based on issuance of a compulsory license for each product and each medicine. No express limits No exclusion on exporting members.
(Africa Group originally favored production by developing countries only.
Developing and least developing countries only.

Diversion Controls 1. Strict diversion controls to ensure that the entirety of the exports/imports are consumed in the importing country only.
2. No diversion rule precludes export with a regional trade system.
1. Strict diversion measures including regulatory and administrative measure in the exporting and importing countries.
2. No diversion rule precludes export with a regional trade system.
Diversion measure shall not be unnecessary, onerous, or reduce access to medicines. 1. Production for supply and export to authorized recipients only.
2. Identification through special labeling.
3. Exporter liability for failure of 1 and 2.
4. Reasonable measure by importing country to prevent re-export.
5. Other WTO members would protect against diversion, import, and sale.

Notification and Transparency 1. Notification to patent holder and opportunity for patent holder to improve its offer.
2. Strict notification to the WTO. Notification to the WTO might trigger some kind of approval procedure in the WTO (unclear).
1. Notification to the patent holder with opportunity for offers of voluntary licenses and/or discount price offers Non-burdensome notification procedures. 1. Notification by importing member to the WTO of product, amount, and duration.
2. Notification by importing member of lack of manufacturing capacity according to criteria.
3. Publication on WTO webpage.
4. Notification by the supplying member of details of the compulsory license listed on WTO webpage.

Methodologies: U.S. E.U. Africa Group WTO

Article 30 No stated flexibility for a limited exception under Art. 30. Originally considered an Article 30 approach, but later discredited it. (No direct discussion, but previously referenced at length by Brazil/India and to some extent by the Africa Group) Possible depending on safeguards and limits

Article 31 1. Insists on an Article 31 solution that modifies the predominantly for domestic use rule of subparagraph (f).
2. Requires drug-by-drug and country-by-country compulsory licenses in both exporting and importing countries if competing patents are on file.
Now prefers a qualified amendment of Article 31(f), but otherwise resort to compulsory licenses in both importing and exporting countries. 1. Notification and negotiation to the patent holder where there is a patent in the importing country pursuant to Art. 31(b).
2. Expeditious procedures to determine adequate remuneration.
3. Regional arrangements are permissible.
1. Preference for Art. 31. 2. Ordinarily requires prior negotiation with patent holder.
3. Domestic market can include duly notified regional trade agreement involving developing and least develop countries only so long as importation is non-infringing in each country in the regional trade agreement.

Amendment, Waiver, Interpretation Strong preference for a waiver provision with some opportunity for extensions.
Prefers amendment after a short waiver. Must be permanent, legally secure and predictable.
All three are possible.

Transfer of Technology No discussion No discussion Developed countries should transfer pharmaceutical capacity to developing countries.
No discussion

Special interventions:: Pharmaceutical Industry WTO India

1. Covered disease limited to HIV/AIDS, TB, and malaria, and similar epidemics.
2. Limit eligible importers to exclude middle-income developing countries with “substantial middle and upper classes.
3. Favors a short waiver period.
4. Favors strict rules against diversion.
Supports use of Article 30. 1. Strong arguments for creating a limited exception for export under Article 30.
2. Prefers local production in developing countries
3. Direct reference to importance of economies of scale.

Conditionalities:	U.S.	E.U.	South Africa, India, Brazil, and others	WTO
Covered Diseases	References “grave” public health problems, esp. HIV/AIDS, TB, and malaria	Emphasizes HIV/AIDS, TB, and malaria.	No limit on scope of diseases covered	Reference to public health problems referenced in Paragraph 1 of the Doha Declaration without clarity re Big Three or all diseases.
Products	Pharmaceutical products and processes only.	Pharmaceutical products and processes only.	All medicines and vaccines, products used to administer medicines and vaccines, and diagnostic products	Pharmaceutical products and processes; further discussion on diagnostics
Importing Countries	1. All least developed countries. 2. Other developing countries according to unspecified criteria involving levels of income and development. 3. Limited pharmaceutical capacity to produce any medicines. 4. Explicitly covers countries without patents in force.	1. Developing countries with no/insufficient manufacturing capacity (suggesting stringent criteria for eligibility).	1. No a priori exclusion. Each member may determine if it has insufficient manufacturing capacity with respect to a particular product. Specifically, no criteria based on level of national income or of economic development. 2. Members may opt out.	1. Per se inclusion - Least Developed Countries; 2. Per se exclusion - Non-transitional, developed countries; 3. Based on objective criteria of a lack or insufficiency of manufacturing capacity, certain developing country members. 4. Questionable eligibility of transitional developing countries and high-income developing countries.
Exporting Countries	Production and export by developing countries only based on issuance of a compulsory license for each product and each medicine.	No express limits	No exclusion on exporting members. (Africa Group originally favored production by developing countries only.	Developing and least developing countries only.
Diversion Controls	1. Strict diversion controls to ensure that the entirety of the exports/imports are consumed in the importing country only. 2. No diversion rule precludes export with a regional trade system.	1. Strict diversion measures including regulatory and administrative measure in the exporting and importing countries. 2. No diversion rule precludes export with a regional trade system.	Diversion measure shall not be unnecessary, onerous, or reduce access to medicines.	1. Production for supply and export to authorized recipients only. 2. Identification through special labeling. 3. Exporter liability for failure of 1 and 2. 4. Reasonable measure by importing country to prevent re-export. 5. Other WTO members would protect against diversion, import, and sale.
Notification and Transparency	1. Notification to patent holder and opportunity for patent holder to improve its offer. 2. Strict notification to the WTO. Notification to the WTO might trigger some kind of approval procedure in the WTO (unclear).	1. Notification to the patent holder with opportunity for offers of voluntary licenses and/or discount price offers	Non-burdensome notification procedures.	1. Notification by importing member to the WTO of product, amount, and duration. 2. Notification by importing member of lack of manufacturing capacity according to criteria. 3. Publication on WTO webpage. 4. Notification by the supplying member of details of the compulsory license listed on WTO webpage.

Methodologies:	U.S.	E.U.	Africa Group	WTO
Article 30	No stated flexibility for a limited exception under Art. 30.	Originally considered an Article 30 approach, but later discredited it.	(No direct discussion, but previously referenced at length by Brazil/India and to some extent by the Africa Group)	Possible depending on safeguards and limits
Article 31	1. Insists on an Article 31 solution that modifies the predominantly for domestic use rule of subparagraph (f). 2. Requires drug-by-drug and country-by-country compulsory licenses in both exporting and importing countries if competing patents are on file.	Now prefers a qualified amendment of Article 31(f), but otherwise resort to compulsory licenses in both importing and exporting countries.	1. Notification and negotiation to the patent holder where there is a patent in the importing country pursuant to Art. 31(b). 2. Expeditious procedures to determine adequate remuneration. 3. Regional arrangements are permissible.	1. Preference for Art. 31. 2. Ordinarily requires prior negotiation with patent holder. 3. Domestic market can include duly notified regional trade agreement involving developing and least develop countries only so long as importation is non-infringing in each country in the regional trade agreement.
Amendment, Waiver, Interpretation	Strong preference for a waiver provision with some opportunity for extensions.	Prefers amendment after a short waiver.	Must be permanent, legally secure and predictable.	All three are possible.
Transfer of Technology	No discussion	No discussion	Developed countries should transfer pharmaceutical capacity to developing countries.	No discussion

Special interventions::	Pharmaceutical Industry	WTO	India
	1. Covered disease limited to HIV/AIDS, TB, and malaria, and similar epidemics. 2. Limit eligible importers to exclude middle-income developing countries with “substantial middle and upper classes. 3. Favors a short waiver period. 4. Favors strict rules against diversion.	Supports use of Article 30.	1. Strong arguments for creating a limited exception for export under Article 30. 2. Prefers local production in developing countries 3. Direct reference to importance of economies of scale.