WTO TRIPS Council (June 2015): LDC Group Presentation on the Extension of the Decision for Pharmaceutical Products

The LDC Group delivered the following statement on Wednesday, 8 June 2015 during WTO TRIPS Council discussions on their request on the extension of the decision on pharmaceutical products.

PRESENTATION BY THE LDCS GROUP TO THE TRIPS COUNCIL ON THE EXTENSION OF THE DECISION ON PHARMACEUTICAL PRODUCTS, 09-10 JUNE 2015

Mr. Chairman,

I make this presentation on behalf of the LDCs group. We thank you for calling this meeting and for your report.

During the last Council meeting our coordinator Bangladesh submitted a duly motivated request on the extension of the transition period under Article 66.1 of the TRIPS Agreement for the Least Developed Country members with respect to Pharmaceutical Products and for Waivers from Obligations of Article 70.8 and 70.9 of the TRIPS Agreement. That request is reflected in document IP/C/W/605. Today is the first opportunity for the Group to formally present this request to you Mr. Chairman and all distinguished colleagues attending the Council.

Mr. Chairman,

It will be recalled that the current pharmaceutical transition period, which is set to expire on 01 January 2016 is comprised of two WTO decisions, TRIPS Council Decision, IP/C/25, dated 01 July 2002, addressing pharmaceutical product patent and data protections; and General Council Decision, WT/L/478, addressing market exclusivity rights under Article 70.9. This 2002-2016 transition period was specifically without prejudice to the right of LDCs to seek and obtain further extensions. This special pharmaceutical transition period was first agreed upon in Paragraph 7 of the Doha Declaration on the TRIPS Agreement and Public Health in recognition of the gravity of the public health problems afflicting LDCs and their acknowledged right to maximum flexibility to take steps to ensure access to medicines for all.

Mr. Chairman,

The classification of LDCs is contingent on a number of key human development indicators including levels of poverty, literacy, infant mortality and economic vulnerability. There are currently 48 countries which meet this criteria. 34 of these countries are members of the WTO. Four countries have so far graduated out of this category, namely: Botswana in 1994; Cape Verde, in 2007; Maldives in 2011 and Samoa in 2014. To try and illustrate our point and put things into perspective, we would like to invite the Council on this short trip of numbers.

The LDC Report of 2014, prepared by UNCTAD entitled: Growth With Structural Transformation: A Post-2015 Development Agenda, observed that in 2013, the LDC current account deficit reached US$40Bn. According to the market access study undertaken by the WTO in 2014, the LDCs share in world merchandise trade in 2013 was at 1.24%, with a staggering deficit of US$60.6 billion. Our participation in world services exports was a paltry 0.68%. Investment going to LDCs is not any different. According to the 2013 UNCTAD Investment Report, inflows to the LDCs represented only 1.9% of global inflows. According to the 2013 UNIDO Report, the share of manufacturing value added for LDCs actually declined from 2% in 1992 to 1% in 2012.

That not withstanding in 2013, UNCTAD also reported that the population growth is projected to double to 1.7 billion by 2050. Many LDCs are now at a critical stage of development whereby population growth is high, and the socio-economic challenges are massive. 400m of our people, i.e, 46% of our population, live below the poverty line (USD 1.25 a day). They disproportionately suffer health?risks associated with poverty such as malnutrition, unsafe water and poor sanitation. About 50% of health expenditure in LDCs is also out of pocket. LDCs are the world’s most impoverished countries with the weakest technological capacity.

It was with this in mind that the framers of the TRIPS Agreement recognized in the Preambular paragraphs of the Agreement, the special needs of the least-developed country Members in respect of providing MAXIMUM flexibility in the domestic implementation of laws and regulations in order to enable them to create a sound and viable technological base.

Mr. Chairman,

This now brings us to the substance of why we are here. Our request is premised on Article 66.1 of the TRIPS Agreement. It states as follows: “In view of the special needs and requirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, such Members shall not be required to apply the provisions of this Agreement, other than Articles 3, 4 and 5, for a period of 10 years from the date of application as defined under paragraph 1 of Article 65. The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period.”

As we have highlighted in our request, access to affordable pharmaceutical products is a prerequisite, to deal with the numerous public health challenges facing LDCs. LDCs are home to some of the world’s most vulnerable people and bear considerable health burdens. They face growing burdens of neglected, infectious, and chronic non-infectious diseases. Because of market failure in the patent-based innovation system, diseases that mainly affect poor people in lower income countries – so-called neglected diseases, including Ebola – still do not have many treatment options.

In 2011, some 9.7 million of the 34 million people living with HIV worldwide, lived in LDCs. 4.6 million were eligible for antiretroviral (ARV) treatment in accordance with the 2010 World Health Organization HIV treatment guidelines, however only 2.5 million were receiving it.

In 2013, the situation was different. UNAIDS and UNDP observed in their statement of support issued on 21 May, that people living with HIV who are not receiving anti retroviral therapy has reduced from 90% in 2006 due to the effective use of the transition period to scale up access to treatment for HIV and its co-infections by importing or manufacturing lower-cost generic medicines. However the treatment gap remains massive. At the end of 2013, 63% of the 10.7m people living with HIV in LDCs do not have access to antiretroviral therapy.

According to UNAIDS, “there is concern that without extension of the transition period, access to antiretroviral therapy and other key medicines in LDCs will face real challenges.” Further, that the situation regarding availability and pricing of HIV-related medicines will be more complex than the situation in 2001 when the Doha Declaration was adopted….and the progress that has been made to improve access to HIV-related medicines in these countries will be reversed.”

LDCs also bear increasing health burdens of Non Communicable Diseases (NCDs) than in higher income countries. According to a WHO Status Report of 2010, on non-communicable diseases, in the African Region, a region with many LDCs, the prevalence of NCDs is rising rapidly and is projected to cause almost three-quarters as many deaths as communicable, maternal, perinatal, and nutritional diseases by 2020, and to exceed them as the most common causes of death by 2030. In the specific case of cancer, data from low-income countries suggests that cancer incidence is expected to rise by 82% from 2008 to 2030, whereas in high-income countries incidence is expected to rise at a much lower rate of 40%, in part due to widespread access to vaccines and medicines.

The UN Human Rights Council adopted Resolution A/HRC/23/L.10/Rev.1 of 11 June 2013 on access to medicines in the context of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health; the 2011 UN declaration on HIV and AIDS; the WHO Global Action Plan for the Prevention and Control of NCDs 2013-2020; and the 2012 RIO+20 United Nations Conference on Sustainable Development have all urged States to promote access to medicines for all, including through the use, to the full, of the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights which provide flexibility for that purpose. The extension of the transition period, therefore, is critical to enable LDCs to be able to import affordable generic medicines as well as to strengthen local production capacity.

BILATERAL CONSULTATIONS

Mr. Chairman, upon submission of this request, we engaged the partners in bilateral consultations, both developed and developing. The objective was to understand their concerns with the view to explaining our request. A number of issues were raised, but we would like to address four of them, which seemed common to almost all the meetings we had. (i) What is the relationship between the 2013 General transition period and the 2002 pharmaceutical decision; (ii) Whether or not, LDCs had utilized the pharmaceutical transition period afforded by Paragraph 7 of the Doha Declaration and as adopted by the TRIPS Council in 2002; (iii) the rationale behind the request for waivers from Articles 70.8 and 70.9; and the (iv) the question of duration.

THE GENERAL TRANSITION PERIOD VIS-A-VIS THE 2002 PHARMACEUTICAL DECISION

Mr. Chairman,

It will be recalled that in 2001, WTO Members agreed to Paragraph 7 of the Doha Declaration on TRIPS & Public Health, which accorded LDCs a specific pharmaceutical transition period for 15 years until 2016. In 2002, Paragraph 7 of the Doha Declaration was formally adopted as a TRIPS Council decision (IP/C/25). It is important to recall that this specific pharmaceutical transition period was granted to supplement the general transition period that continued until 2005. It was adopted in recognition of the gravity and magnitude of public health challenges afflicting LDCs. Clearly it was also recognized that unlike other intellectual property, pharmaceutical products, and access to such products, deserve special attention and measures, as it is a matter of life and death. It is for this reason, that even the duration granted for the pharmaceutical transition period was much longer than the general transition period at the time.

It is important to stress that the negotiations and the decision of the 2013 general transition period, did not give any special consideration to the matter of pharmaceutical products. This is evidenced by the 2013 decision text which states that it is “without prejudice” to the 2002 pharmaceutical decision and the right of LDCs to seek further extensions. This phrase can only be interpreted, in good faith, as the WTO Members’ confirmation that the 2013 general extension does not affect or preclude the right of LDCs to request for further extensions of the 2002 pharmaceutical transition period. LDCs consented to the text of the 2013 decision on the basis of this understanding. Their position would have been different if any Member had expressed at that time the view that LDCs would have no right to such further extensions.

A specific decision on pharmaceutical products is critical to address the public health needs of LDCs. Unlike the 2013 extension, which is general, the 2002 pharmaceutical extension specifically mentions that “with respect to pharmaceutical products”, LDCs do not have to “IMPLEMENT OR TO APPLY” patents or test data protection or “TO ENFORCE” such “rights”. The specificity and clarity of Paragraph 7 of the Doha mechanism and the 2002 pharmaceutical decision has provided LDC governments, donors and suppliers, the certainty to confidently supply and procure affordable generic medicines. Thus it is without a doubt that a specific pharmaceutical decision is important to enable procurement of affordable generic medicines.

The 2002 pharmaceutical extension decision does not have any real or perceived conditionalities whatsoever. It provides certainty among policy makers with regard to the application of the transition period by LDCs. Given the critical importance of pharmaceutical products and the known concerns of the effects of intellectual property on access to medicines, LDCs need an unconditional decision as granted in 2002 that is explicit that there is no obligation to implement, apply or enforce patents and test data obligations with respect to pharmaceutical products.

Mr. Chairman, for the reasons we have described about the particular health challenges faced by LDC populations; what the LDC Group is requesting of the TRIPS Council is merely a continuation of the Para 7 understanding in Doha. The 2013 decision does not preclude the need for a specific extension addressing the issue of pharmaceutical products.

WHETHER THE 2002 SPECIFIC PHARMACEUTICAL TRANSITION PERIOD HAS BEEN VALUABLE TO LDCs?

Yes. The 2002 TRIPS Council Decision has been used extensively by LDCs and has been invaluable in assisting LDCs to access affordable pharmaceutical products. According to available information, following the adoption of the 2001 Doha Declaration, more than 20 LDCs have relied on Paragraph 7 of the Doha Declaration and the 2002 pharmaceutical decision, for the importation of generic medicines. Several LDCs such as Sierra Leone, Djibouti and Zambia relied on the 2002 pharmaceutical decision and issued declarations with regard to non-enforcement of patents for certain medicines to facilitate importation, and to speed up the supply of the medicines. In addition, inspired by the 2002 pharmaceutical decision and with the aim to improve their health situation, several LDCs have excluded pharmaceutical products from the scope of patenting for example Uganda, Rwanda and Burundi.

Recently the IDA Foundation, a non-profit provider of generic drugs to LDCs sent a letter to our coordinator, the Ambassador of Bangladesh, where they expressed their full support for the LDC Group request. It observed that the pharmaceutical waiver “allows LDCs to authorize the importation of generic medication regardless of patent status” and the existence of “the pharmaceutical waiver and specifically the provisions of Paragraph 7”, gave IDA “the necessary legal protection to be able to supply ARVs on a large scale without fear of patent infringement suits”. It also stresses that the use of the pharmaceutical waiver is not limited to ARVs but is “relevant for both the production and procurement of products increasingly needed in LDCs, such as those for the treatment of non-communicable diseases”. The IDA Foundation letter, illustrates that in the absence of a TRIPS Council decision continuing the pharmaceutical extension, suppliers of medicines and procurement agencies would be very reluctant to supply medicines that are patented or whose patent status is unknown for fear of patent infringement suits

Further, UNITAID, which is an organisation that funds projects to improve access to medicines for HIV, TB and malaria in 94 countries, including many LDCs, in its statement of support for the extension acknowledged the fact that “This exemption has facilitated access to affordable medicines in LDCs, and UNITAID urges WTO Members to unconditionally approve the request by the LDCs.”

To that end therefore, it serves to show that Paragraph 7 of the Doha Declaration and the 2002 pharmaceutical decision have been effective and successful in promoting access to medicines and saving lives in LDCs. Civil society organizations from around the world have in their letter dated 05 June to WTO Members referred to the Paragraph 7 mechanism as “one of the most successful provisions of the Doha Declaration on TRIPS and Public Health”.

THE WAIVER FROM EXCLUSIVE MARKETING RIGHTS (EMR) OBLIGATIONS UNDER ARTICLE 70.9

Mr Chairman,

Exclusive Marketing Rights or EMRs in short confer patent-like rights and is another form of monopoly. If LDCs are bound to grant EMRs, the value of a pharmaceutical transition period would be very limited, since access to medicines and other pharmaceutical products could be effectively blocked for at least five years.

The transition period would be redundant if its basic objective of enabling access to affordable generic medicines is curtailed. Therefore, following the 2002 pharmaceutical transition period, the WTO General Council in 2002 granted a waiver from obligations to grant Exclusive Marketing Rights. If this obligation had not been waived, LDCs would have been required to recognize monopolies of patent applicants for pharmaceutical products for 5 years, delaying the introduction of generic medicines and thus limiting access to affordable medicines. There is need to renew this waiver along with the pharmaceutical transition period.

THE WAIVER FROM MAILBOX OBLIGATIONS UNDER ARTICLE 70.8

Mr. Chairman,

The mailbox obligation requires LDCs not recognizing pharmaceutical patents at the time of entry into force of the WTO Agreement to create a system for receiving such patent applications to be examined at the end of the transition period. The mailbox obligation should be waived for the following reasons:

The requirement to install patent filing systems, implies considerable financial and administrative efforts that will place additional burdens on vulnerable LDCs. Further, requiring LDCs to install mailbox when they don't even have to grant any patents (under the General extension), does not make sense. The mailbox obligation may also have a chilling effect on generic producers, who may be deterred from investing in generic production of pharmaceuticals, which could in future be patented. This will have an adverse effect on the availability of affordable generic medicines for LDCs.
Mr. Chairman,

THE ISSUE OF DURATION FOR AS LONG AS WE ARE LDCS

It would be remiss if we closed our presentation without tackling the issue of duration. As we highlighted before in our opening paragraphs, the health challenges facing LDCs are massive – with communicable and non-communicable diseases. The state of economy remains appalling; while poverty levels remain high.

It would be unconscionable for WTO Members to grant LDCs – the most vulnerable segment of countries – a time limited transition period, requiring them to repeatedly seek extensions. A time limited transition period creates an uncertain environment for the producers of affordable medicines, procurement agencies, donors as well as LDC governments that rely on the specific pharmaceutical transition period to produce and import affordable medicines. This in turn jeopardizes the health situation of the people and communities within LDCs, with especially adverse consequences for the scaling up of HIV/AIDS treatment. LDCs cannot deal with increasing communicable and non-communicable disease burden without the assurance of continuous availability of generic medicines as long as they remain LDCs. This view has been echoed by the Communities Delegation of People living with HIV, in their statement of support issued on 05 May 2015. In the same vein, in 2012, the Global Commission on HIV and Law recommended that “WTO Members must indefinitely extend the exemption for LDCs from the application of TRIPS provisions in the case of pharmaceutical products”.

By granting a renewable transition period, Article 66.1 recognizes that for as long as a country remains an LDC, it will face various constraints, and will need an exemption from TRIPS obligations. Previously a time limited duration was given, and yet during this period, the socio-economic situation in LDCs has worsened and the health needs remain even greater. You have heard the numbers.

In closing Chair, Considering that our health needs persist, and in many ways are growing because of the continued threat of infectious, neglected, and non-communicable diseases and other new emerging diseases. As evidenced by our continuing LDC status, we still face unrelenting development and capacity challenges. To address these pressing public health needs, to secure the ability to progressively realize the right to health, and to ensure our continuing right of access to more affordable medicines of assured quality; we the Least Developed Countries call upon you and the Council to grant the extension of the transitional period under Article 66.1 of the TRIPS Agreement for Least Developed Countries with respect to Pharmaceutical Products, and for waivers from the obligation of Articles 70.8 and 70.9 for as long as the member is an LDC.

I thank you
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SPECIAL THANKS TO BE GIVEN AFTER INITIAL ROUND OF INTERVENTIONS

Mr. Chairman, we would like to express our profound appreciation for the extensive support that we have received from all the distinguished Members in this Council, Members of Parliaments in various jurisdictions who have written letters of support to there respective Governments urging them to grant this request; and International Organizations, such as the WHO, UNDP and UNAIDS, UNITAID, the NGO delegation to UNITAID; and Communities Delegation on the Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria; hundreds of Civil Society Organizations and networks from around the world as well as Suppliers of Generic Medicines in LDCs.

We also express our sincere appreciation to all the partners who have expressed keen interest in learning more about our request. As a group, we are committed to address your concerns with the view to ensuring a quick conclusion of this matter with the adoption of the decision to extend the transition period consistent with our request

I thank you