Health GAP
www.globaltreatmentaccess.org | www.healthgap.org

Brook K. Baker, Health GAP

Give the recent passage of the Decision of 30 August 2003 on Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health [Paragraph 6 Agreement] and the General Council Chairperson's Statement [Chairman's Statement] of that same date, it is important to clarify what the new agreement covers and what it doesn't. In particular, it is important to clarify all of the existing methods for accessing generic medicines that are not restricted by or affected by the Paragraph 6 Agreement. This clarification is particularly important given the confusion that has arisen around Brazil's decree on September 5, 2003, authorizing the importation of generic versions of lopinavir (Abbot), nelfinavir (Roche), and efvirenz (Merck) from India and China.

In this regard, it is important to note at the outset that there are now four nestled texts - the original WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (1994) [TRIPS], the subsequent Ministerial Declaration on the TRIPS Agreement and Public Health (2001) [Doha Declaration], the Paragraph 6 Agreement, and the Chairman's Statement - which regulate the production and export of generic medicines and their importation. In this regard, it is also important to remember, that options within a particular country will also be circumscribed by its national legislation and perhaps by its participation in bilateral or regional trade agreements that limit rights it might otherwise have under the four WTO agreements referenced above.

Many different kinds of exporters are currently permitted to sell generic medicines for export where the medicines are not covered by patent protection in the exporting countries. No-patent countries permitted to do this (depending on their own national legislation) include:

(1) non-WTO members (which can produce and export medicines without WTO complications because of their non-membership, though they might have national legislation protecting patents which would forestall their rights to produce and export generic versions of patented medicines), (2) least developed countries (which do not have to provide patent protection for pharmaceutical products or processes until 2016, although many do so prematurely or under pressure from the U.S. in regional trade agreements), (3) countries like Brazil (which did not start granting patents on medicines until compelled to do so by the TRIPS Agreement and thus who can make generic versions of pre-1995 drugs legally even without a compulsory license), (4) countries like India (which did not have patent production for pharmaceutical "products" but only for pharmaceutical "processes" and thus have until 2005 to become fully TRIPS-compliant and in the meantime and into the future can continue to make lawful copies of medicines not yet patented as products), (5) other countries where for one reason or another the patent-holder has not filed a patent application.

India, of course, is the prime example of a large-scale producer with a robust generic industry. Because of its status as a no-patent country (no patents on pharmaceutical producst), it can make generic copies of pre-1995 medicines patented elsewhere without restriction and will continue to be able to do so indefinitely - the Paragraph 6 Agreement and the Chairman's Statement have nothing to do with this TRIPS-compliant right. This is why Brazil can legally issue a compulsory license for import from India for any pre-1995 generic it sells.

The so-called "mailbox" rule (Article 70 of TRIPS) is a complication even for countries like India that are supposed to hold post-1995 patent applications in a "mailbox" pending their TRIPS compliance in 2005/06. At that time, the patent application would be given priority and the patent, if granted, would extend for the remainder of its 20-year term. While the patent application is waiting in the "mailbox," the patent holder is supposed to be given 5 years of marketing exclusivity once the product has been registered for distribution by the country's medicines registration agency. (It is unclear how many post-1995 medicines have been placed in the mailbox in India and how many are receiving market exclusivity - maybe someone knows but I don't.)

In addition to the no-patent options described above, even in countries with patent protection, there are TRIPS-compliant provisions for exporting generic medicines once a compulsory license has been issued in at least two instances:

(1) by an exporter with a compulsory license which may legally export a non-predominate share of its production to other countries (49% or less) under Article 31(f) and (2) by an exporter with a compulsory license issued to remedy an anti-competitive practice issued under Article 31(k); such an exporter may export as much of a product as it wants.

Various commentators have been concerned that the Paragraph 6 Agreement and Chairman's Statement might somehow compromise or limit flexibilities for accessing imported generics that existed under previous agreements, including TRIPS itself and the Doha Declaration. I do not think that this is a credible concern, certainly not with respect to the five no-patent options I described above nor even for the Article 31(f) and Article 31(k) options. In this regard, paragraph 9 of the Paragraph 6 Agreement reads as follows:

This Decision is without prejudice to the rights, obligations and flexibilities that Members have under the provisions of the TRIPS Agreement other than paragraphs (f) and (h) of Article 31, including those reaffirmed by the Declaration, and to their interpretation. It is also without prejudice to the extent to which pharmaceutical products produced under a compulsory licence can be exported under the present provisions of Article 31(f) of the TRIPS Agreement.

I read this paragraph as expressly acknowledging and condoning all of the no-patent options I have outlined. paragraph 9, it does not directly limit rights to export under 31(k) - it doesn't mention any limit on 31(k) rights. Moreover, even with respect to 31(f), pargarph 9 continues to permit, by implication, export of non-predominate amounts. In fact, I would suggest reading Paragraph 9 even more liberally to mean that it does not exclude the possibility of Article 30 production in an exporting country. Although there is no direct approval of an Article 30 approach, neither is there an express disapproval: "the Decision is without prejudice to the rights, obligations and flexibilities that Members have under the provisions of the TRIPS Agreement other that paragraphs (f) and (h) of Article 31." In my mind, Article 30 is still one of those flexibilities.

The real problem in the Paragraph 6 Agreement and in the Chairman's Statement concerns post-1995 discoveries and arises in 2005 when no one but non-WTO members, least developed countries, and/or companies in WTO member countries that have issued compulsory licenses will be able to manufacture and export a patented medicine. It is at this time that countries like India and China will have to become fully TRIPS-compliant and will have to provide patent protection for post-1995 pipeline/mailbox patent applications and for all post 2005/06 discoveries, if a patent has been filed and granted.

In conclusion, the issue of coverage under the Paragraph 6 Agreement will arise in 2005 with respect to post-1995 drugs where an exporting country must issue a compulsory license to a manufacturer. That new compulsory license would permits the designated manufacturer to bypass the "primarily for domestic use rule" which would otherwise restrict the exporter to exporting no more than 49% of its products.