WTO TRIPS Council (November 2012): Intervention of the United States on the review of the Paragraph 6 system

On 6 November 2012, the United States delivered the following intervention under agenda item F, "Review under Paragraph 8 of the Decision on the Implementation of Paragraph 8 of the Doha Declaration on the TRIPS Agreement and Public Health".

F. REVIEW UNDER PARAGRAPH 8 OF THE DECISION ON THE IMPLEMENTATION OF PARAGRAPH 6 OF THE DOHA DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH

• Thank you, Mr. Chairman, and the Secretariat, for the report on the status of notifications of acceptance of the 2005 Protocol Amending the TRIPS Agreement.

• The United States strongly supports the paragraph 6 system as established under the 2003 waiver decision and the 2005 Protocol.

• We encourage other Members to notify their acceptance of the amendment so that it can enter into force.

• We want to take this opportunity as part of today’s review of the implementation of paragraph 6 on the Doha Declaration on the TRIPS Agreement and Public Health to provide some context.

• As we have noted previously (such as in paragraph 202 of IP/C/M/67, February 15, 2012), the paragraph 6 system is one of many tools to address the issue of access to medicines.

• There are also other tools of course to address this important issue as well, which also merit discussion, including tariff reduction and voluntary licensing.

• As we have noted previously, such as in paragraph 203 of the same document, tariffs are applied to medicines, to the components of those medicines, such as active ingredients, and medical products. Tariffs imposed by governments are, however, borne by consumers, by patients.

• In recognition of this reality, during the Uruguay Round, the United States joined several other Members (Canada, the European Union, Japan, Norway, Switzerland, and Macao) in eliminating tariffs on medicines and active ingredients in order to liberalize trade, lower costs, and increase access to these essential products.

• Since then, the participants in the pharmaceutical zero-for-zero agreement have updated it four times in order to include additional inputs for medicines, thereby reducing costs of production for medicines.

• However, some countries continue to impose relatively high tariffs on medicines, inputs to medicines and medical products. According to an October 18, 2012 paper by the WTO Economic Research and Statistics Division entitled “More Trade for Better Health, International Trade and Tariffs on Health Products”, several countries continue to maintain relatively high tariff rates on these products, despite a general trend toward tariff reduction on these goods.

• The report concludes, “the question to ask is why countries even maintain tariffs on health products. Imposing tariffs typically translates into higher product prices, especially in the presence of long supply changes. Maintaining tariffs ultimately means taxing the sick and creating additional costs for the health system.”

• One case exemplifies this point. Last year, the Assistant Minister for Public Health and Sanitation in Kenya reported that his country’s removal of taxes and tariffs for malaria products lead to a 44 percent decline in the rate of infant mortality and disease, and a 50 percent reduction on infant mortality in one region.

• Moreover, the impact of tariffs on medicines extends beyond consumers. Not only do medicines tariffs adversely impact patients, but as a 2005 WHO study demonstrated, tariffs on active ingredients adversely impact local industries, unless they can make the active ingredient (and often they do not).

• Turning from tariffs to licensing, the United States notes that voluntary licensing and policies that promote such licensing also provide important tools to promote access to medicines.

• I would like to briefly explain some of the activities of the U.S. National Institute of Health that exemplify this trend.

• For example, the NIH was the first contributor to the Medicines Patent Pool (MPP) in the voluntary licensing of U.S. government-owned patents related to the use of HIV-retroviral (ARV) protease inhibitor drugs. The MPP promises to enhance access to ARV treatment for people living with HIV/AIDS in developing countries and facilitate the development of new combinations of ARVs and adapted formulations for developing countries.

• The US NIH is only one owner of intellectual property in the area of public health, but our actions are demonstrative of the partnerships that are occurring internationally, and the significant voluntary licensing that occurs. These practices are helping to enhance access to medicines, and we would urge other members to consider participating in this effort.

• Thank you, Mr. Chairman