European Commission supports indefinite exemption for LDCs from WTO IP rules for pharmaceuticals

In a closely watched announcement, the European Commission issued a press release on Thursday, 10 September 2015 supporting the indefinite exemption for least developing country Members of the World Trade Organization (WTO) from TRIPS obligations on pharmaceutical products. These TRIPS obligations include pharmaceutical patents, pharmaceutical test data protection, exclusive marketing rights and the mailbox provisions.

The LDC Group, in their February 2015 submission to the WTO TRIPS Council, requested the following:

11. Article 66.1 provides that the Council for TRIPS "shall, upon duly motivated request by a least developed country Member, accord extensions of this period."

12. Least developed country Members of the WTO hereby submit a duly motivated request for an extension of the transitional period (that ends on 1 January 2016) for as long as the WTO Member remains a least developed country.

13. Least developed country Members also request that the TRIPS Council recommend to the General Council a waiver for LDCs from obligations under Articles 70.8 and 70.9 of TRIPS for as long as the WTO Member remains a least developed country.

At the June 2015 TRIPS Council, Uganda, presenting on behalf of the LDC Group provided a stark reminder of the gravity of the situation facing least-developed countries (according to the World Bank, in 2014, the average per capita income of persons living in LDCs was just $928):

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.

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.

In July 2015, European Trade Commissioner, Cecilia Malmström, foreshadowed the EU position by noting,

By the way, we don't have to wait until the communication is published to take action to support the world's least developed countries. They have requested an exemption from the WTO's intellectual property rules on access to medicines, for as long as they remain LDCs. Provided I have the backing of the College of Commissioners, the Council and this Parliament, I want to respond positively to that request.

The 10 September 2015 press release provided more clarity on the European Commission's position which appears to respond to public health and humanitarian challenges faced by LDCs in accessing medicines.

Specifically, the Commission noted,

The Commission today agreed to support the least developed countries' (LDCs) call for easier access to cheaper medicines by means of an indefinite exemption from World Trade Organization (WTO) intellectual property rules for pharmaceuticals. This exemption allows generic medicines to be imported, and produced locally, regardless of patents, for example when licenses are not available. It means producers of generics and international programmes can supply drugs like HIV treatment in affected countries without fear of patent infringement suits....The poorest countries of the world need effective access to medicines. Although patents stimulate innovation in developed and emerging economies, intellectual property rules should be a non-issue when the world's poorest are in need of treatment. This exemption will give the least developed countries the necessary legal certainty to procure or to produce generic medicines...The WTO granted a time-limited exemption before to these countries, but the Commission believes that extending it indefinitely would give legal certainty for long-term supply as well as enhance local production of much-needed medicines.

Now that the European Commission backs the indefinite exemption (until graduation from LDC status), attention now turns to the position of the United States of America. As President Obama enters the twilight of his administration, what enduring legacy will he leave least-developed countries? The moral choice is clear: the United States should promptly announce its unequivocal support for the LDC exemption.


The full text of the Commission press release is reproduced below.

European Commission supports better access to medicines in poorest countries

Brussels, 10 September 2015

The Commission agreed to support the least developed countries' call for easier access to cheaper medicines by means of an indefinite exemption from World Trade Organization (WTO) intellectual property rules for pharmaceuticals.

The Commission today agreed to support the least developed countries' (LDCs) call for easier access to cheaper medicines by means of an indefinite exemption from World Trade Organization (WTO) intellectual property rules for pharmaceuticals. This exemption allows generic medicines to be imported, and produced locally, regardless of patents, for example when licenses are not available. It means producers of generics and international programmes can supply drugs like HIV treatment in affected countries without fear of patent infringement suits.

Commissioner Malmström said: "The poorest countries of the world need effective access to medicines. Although patents stimulate innovation in developed and emerging economies, intellectual property rules should be a non-issue when the world's poorest are in need of treatment. This exemption will give the least developed countries the necessary legal certainty to procure or to produce generic medicines. I am confident that the Council will support this approach, and that the EU will take the lead in the WTO in this field."

The WTO granted a time-limited exemption before to these countries, but the Commission believes that extending it indefinitely would give legal certainty for long-term supply as well as enhance local production of much-needed medicines.

The Council must now decide on the Commission's proposal. This will determine the position to be taken by the Commission on behalf of the European Union in the WTO special Council on intellectual property – the TRIPS Council. That body will take a decision on the request from LDCs for an indefinite exemption at its 15-16 October 2015 session.

This step complements the Commission funded development programmes for supply of essential medicines in developing countries and reinforces the coherence of the EU approach on development policy.