Will U.S. create barriers to LDCs' future access to medicines?

Professor Brook K. Baker, Health GAP and Northeastern U. School of Law

September 7, 2015

Earlier this year, WTO Least Developed Country Members requested an unconditional extension of the expiring WTO TRIPS transition period that exempts them from having to implement pharmaceutical patents and other intellectual property protections that constrain their ability to make or procure low-cost generic medicines.  Informed sources indicate that the U.S. is currently opposing the LDC draft extension. While the exact US government position has not yet been made public, it seems likely from past US positions that the US Trade Representative might be opposing several of the most important elements of LDC request that make the extension truly meaningful for access to medicines. 

As the next TRIPS Council meeting is on October 15, it is likely that the USTR has begun bilateral negotiations with LDCs with respect to their request for an unconditional extension from the requirements of the TRIPS Agreements with respect to pharmaceutical patents, data protections, marketing exclusivity, and mailbox requirements.  LDCs are seeking an extension for as long as they remain LDCs.  They ground their request both on the language of the Doha Declaration on the TRIPS Agreement and Public Health and Article 66.1 of the TRIPS Agreement.  These binding, unanimous-consent documents grant LDCs the right to seek further extensions of their TRIPS transition period and require that such extensions "shall" be accorded upon properly motivated request. 

The USTR is continuing its traditional silence on its formal position with regard to the LDC request.  It has reportedly consulted on the request, but has not done so extensively with public health and human rights groups that are on record that the US should accede to the LDC request without conditions.

Reading the tea leaves of past US positions in negotiations on earlier transition periods and their extension and the US position on the August 30 Decision on Paragraph 6 of the Doha Declaration concerning compulsory license supply to countries with insufficient domestic manufacturing practice, it is easy to identify policy positions that the USTR must avoid.

First, the US may but must avoid efforts to shorten the time limit of the proposed extension as short extensions do not allow LDCs the policy space to secure durable sources of lower cost generic medicines nor a sufficient time period to develop sustainable local pharmaceutical capacity.  LDCs made a request two years ago for a transition period from their basic TRIPS-compliance obligations for as long as they remained LDCs.  The US and EU opposed this rational request and instead insisted on no more than the eight year extension granted (2013-2021).  The need for a transition period for pharmaceuticals as long as a country remains an LDC is even clearer than for the general TRIPS compliance, as the health needs of LDC populations requires paying the lowest possible prices for medicines of assured quality.  Surely the US will not once again oppose an extension for countries that remain trapped in an LDC development quagmire and to force them to return every few years for an additional time-limited extension.  

Second, the US may but must not tie the granting of pharmaceutical extension to a declaration, express or implied, that intellectual property protections are unequivocally good for development.  In the 2013 extension process, the USTR insisted on a IP fundamentalist clause genuflecting to the magical development elixir of patent monopolies.  It required a clause from LDCs expressing "their determination to preserve and continue the progress towards implementation of the TRIPS Agreement."  Regrettably, the best evidence is that increased IP protections and continued efforts towards TRIPS compliance do not create favorable conditions for accelerated development in low-income countries and instead that such polices increase prices and thereby reduce access to global public goods like medicines.  Questions about the negative impacts of easily granted and over-enforced patents are growing even in the U.S. where government programs and private insurers cannot afford some of the astronomically over-priced medicines that have recently hit the market.

Third, the US may but must not demand that LDCs restrict their pharmaceutical capacity, if and when they develop it, to non-commercial purposes only and in particular to serving domestic needs only (See, Chairman's Statement to the August 30 Decision requiring non-commercial purpose).  LDC countries like Lesotho, population 2 million, can simply not build viable pharmaceutical capacity that solely serve small and poor populations.  Viable pharmaceutical enterprises in LDCs, especially in the generics context, need to achieve efficient economies-of-scale and should at least reach regional markets.  More to the point, such industries need time and policy space to develop as existing capacities are non-existent or weak.  Finally, to impose export limits on commercially oriented pharmaceuticals would create a perverse carve out for medicines that is totally inconsistent with technological development rights affirmed in the 2013-21 TRIPS-compliance extension.

Fourth, the US may but must not impose conditions that require LDCs to maintain existing degrees of IP protection.  The first general LDC extension 2006-2013 unfortunately contained a stay-put provision that locked LDCs into the levels of IP protection imposed by their colonial masters or unwisely adopted because of flawed technical assistance from WIPO.  Fortunately, LDCs succeeded in reversing this stay put clause in their 2013-2021 extension with the following provision:  "Nothing in this decision shall prevent least developed country Members from making full use of the flexibilities provide by the [TRIPS] Agreement to address their needs, including to create a sound and viable technological base and to overcome their capacity constraints supported by, among other steps, implementation of Article 66.2 by developed country Members [relating to technology transfer]."  This provision grants LDCs the policy space - free from exclusive, monopoly rights - to advance their development project and to fulfill their human rights obligations including the right to health.

The USTR should immediately disclose its LDC pharmaceutical extension negotiation position.  To the extent that its position includes any of the above retrograde policies, they should be reversed.  Instead, the US should join the emerging global consensus, supported even by the European Union, that the LDC pharmaceutical extension should be granted on requested terms.  Allowing LDCs unfettered access to more affordable generic medicines will also advance the US policy objectives of halting and reversing the global AIDS pandemic where the US has saved billions of dollars in its PEPFAR program by purchasing over 90% of its antiretroviral supplies from generic sources.


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