India: Intervention at WTO TRIPS Council on public health dimension of the TRIPS Agreement

On 3 March 2009, India delivered the following intervention at the WTO Council for TRIPS meeting on the issue of the public health dimension of the TRIPS Agreement in the context of the Dutch seizures.

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INTERVENTION by INDIA

Agenda item ‘M’ – OTHER BUSINESS – Public Health dimension of TRIPS Agreement
Chair,

My delegation would like to draw the attention of Members to developments which undermine the public health dimension of TRIPS Agreement. In the last few months, several consignments of Indian generic drugs have been seized in transit at EC ports. We made an intervention on this issue in the General Council meeting of February 3, 2009. The intervention has been made available to Members at the back of this room.

I will like to mention that my government has taken up the issue bilaterally with the EC and the Dutch Government to urgently review the relevant regulations and the actions of the national authorities based on such regulations, and bring them in conformity with the letter and spirit of the TRIPS Agreement, the rules based WTO system and the DMD on Public Health. We are still awaiting a response.

In addition to the salient aspects of our intervention in the General Council, we would like to make some specific points today in the context of TRIPS Council. Dutch customs authorities have ‘confiscated’ these consignments on grounds of alleged violations of domestic patents and trademarks. This is not a case of ‘temporary detention’ since some consignments continue to be held for over months. Moreover, procedures for their destruction were also initiated. Four such instances have come to the notice of my Government and all these four instances have been reported from the Netherlands. These consignments were headed for Brazil, Peru and Colombia. While one consignment has been returned to the exporter after being held for over a month, the fate of the other three is still unclear. We pointed in GC last month about the consignment of losartan seized in transit in the Netherlands while it was headed for Brazil. The generic drug in question was perfectly IP legitimate generic drug in both India and the destination country. Also, trade of generic drugs is perfectly legitimate.

The action of the Netherlands customs authorities to seize generic drugs, traded between developing countries in full conformity with international disciplines, runs counter to the spirit of the TRIPS Agreement and the resolution 2002/31 of the Commission on Human Rights on the right to enjoy the highest standards of physical and mental health. Measures of this nature have an adverse systemic impact on legitimate trade of generic medicines, South-South commerce, national public health policies and the principle of universal access to medicines. The importance of generic drugs to public health in developing countries and particularly in the LDCs is obvious. Such barriers to legitimate trade of generic drugs will also seriously impair the efforts of civil society organisations engaged in providing medicines and improving public health in the least developed parts of the world. MSF has recently stated that they regularly transport and temporarily store medicines in Europe, en route to users in developing countries. In a letter to the EC Trade Commissioner, MSF has expressed concern over the potential consequences of the seizure of medicines in transit in the EU, which are destined for developing countries. MSF has also asked the EC to clarify its position regarding the implementation of the EC Regulation No 1383/2003 with regard to pharmaceutical products.

In addition to going against the spirit of a rules based trading system and impeding free trade, such acts represent a distorted use of the TRIPS Agreement and the international IP system and circumscribe flexibilities enshrined in TRIPS. Let me elaborate.

Article 41.1 of TRIPS provides that enforcement procedures “shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse” and Article 41.2 provides that the procedures shall be “fair and equitable.” These are ‘General Obligations’ which run through Part III of TRIPS Agreement on Enforcement of IPRs. As I just said, trade of generic drugs is perfectly legitimate. Measures taken by Dutch authorities, clearly, create barriers to such legitimate trade, particularly where there is no risk of diversion to the internal market.

Members have always strived for a balance between public health concerns and protection and enforcement of IPRs. The Doha Ministerial Declaration on TRIPS and Public Health recognized “the gravity of the public health problems afflicting many developing and least-developed countries” and stressed “the need for the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and international action to address these problems.” In Paragraph 4 of that Declaration, WTO members agreed that “the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.” We are aware of EC’s stated commitment to the full implementation of the Doha Declaration on TRIPS and Public health and the WTO August 30th decision. Measures taken by the EC therefore, create serious confusion in our minds.

It is ironical that while on one hand WTO has taken steps to promote access to affordable medicines and remove obstacles to proper use of TRIPS flexibilities, on the other hand some Members seek to negate the same by seizing drug consignments in transit and creating barriers to legitimate trade. Among other things, the implementation of the WTO’s Decision of 30 August 2003 regarding the export of pharmaceutical products to countries with inadequate manufacturing capacity (the Para 6 system), will become even more problematic if patent rights, which are territorial by definition, are enforced for goods in transit. As it is, the Para 6 system has been used only once so far in the last five years.

The concept of ‘territoriality’ is a key stone in the edifice of the TRIPS Agreement. There are no indications that the drug consignment was meant for the markets of the EC. Seizure, and initiating procedures for destruction of such consignments, violates this key principle.

The WTO rules based system provides for freedom of transit by the most economical and convenient routes and without unnecessary delays and restrictions. The act of seizure by the Dutch authorities is therefore, a denial of the rules based system which we seek to build and strengthen in the WTO. Repeat of such actions may have an impact on exporters’ choice of transit routes, which may affect the economics of trade of pharmaceutical products and consequently, have a deleterious effect on access to essential drugs and public health budgets of recipient countries.

My delegation would also like to draw the attention of Members to another trend that is acquiring huge dimensions. This is the effort to implement the protection and enforcement of IPRs in a maximalist manner and thereby upset the delicate balance between rights of IPR holders and the public policy objectives under the TRIPS Agreement. A coordinated approach is being witnessed in several international fora like the World Customs Organisation, World Health Organisation, Universal Postal Organisation etc. to promote the IP maximalist agenda. We also note with dismay efforts by some Members to link safe and efficacious but low cost generics with counterfeit medicines, which is essentially an IPR issue. There is an attempt to enlarge the definition of counterfeits beyond its definition in the TRIPS Agreement, to set maximalist enforcement norms, and to include TRIPS plus provisions in RTAs. These are subtle and concerted ways of circumscribing the flexibilities of the TRIPS Agreement. They also run counter to the spirit of the TRIPS Agreement which is a minimum standards agreement. And, this is certainly counter to the understanding given to developing countries when the TRIPS Agreement was being negotiated.

Mr. Chairman, India attaches the highest importance to protection and enforcement of IPRs in accordance with the TRIPS Agreement. However, we do not see the Agreement as divorced from the Objectives and Principles set out in Art 7 and 8 of the Agreement. Efforts to enshrine new, maximalist TRIPS plus provisions in other forums will seriously undermine the delicate balance in the TRIPS Agreement and raise systemic issues.

Mr Chairman, my delegation will like this Council to take note of these points.

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