Comment

Access to drugs: futile compromise

[ By Christiane Fischer ]

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is one of the core accords of the World Trade Organisation (WTO). Signatory countries have to guarantee companies at least 20 years patent protection for innovative products, including drugs. The monopoly thus conferred gives the pharmaceutical industry the freedom to raise prices of patent-protected drugs to almost any level.

To prevent abuse, the TRIPS Agreement contains escape clauses. In an emergency, for example, a country is allowed to issue compulsory licences and manufacture urgently needed patented medicines even without the patent holder’s consent. At the Doha trade conference in 2001, which marked the start of the so-called “development round”, this concession was explicitly endorsed in the declaration on the protection of public health.

But one question remained unanswered: how were countries with no pharmaceutical industry to get cheaper generic versions of patented drugs? This is a crucial question, for example, for African countries plagued by AIDS. They could not import generics because the TRIPS Agreement prohibits international trade in drugs made under compulsory licence. After lengthy negotiations, the WTO members agreed in August 2003 on a transitional arrangement which would allow poor countries, under certain circumstances, to import generics made under compulsory licence in another country.

A year on, that compromise has been revealed as futile. The agreement contains so many hurdles that no country has yet managed to make use of it. For one thing, both the importing and the exporting country need to issue a compulsory licence, which involves a complex bureaucratic procedure. What is more, poor countries thinking about issuing a compulsory licence have found themselves put under massive pressure by the pharmaceutical industry. In addition, importing countries need to prove to the TRIPS Council that they cannot manufacture the required drug themselves. This sounds simple but is so only for countries with no pharmaceutical manufacturing capacity at all. As for the generic manufacturers in the exporting countries, they are in effect not allowed to make any profit when supplying a country with essential drugs which is not exactly an incentive to accept such a contract. Industrial countries, as well as emerging economies including all the Eastern European countries, even had to declare they would not make use of this exception to TRIPS Agreement rules – a disastrous disqualification for many Eastern European countries with rising rates of AIDS and multiresistant TB.

In actual fact, the transitional rules should have been replaced in July this year by a formal amendment to the TRIPS Agreement. But the industrial countries are in no hurry to sort out the matter. Germany is aligned with the United States and Japan in calling for the present compromise to be adopted exactly as it stands. The federal ministry for economic affairs, which is responsible for the German negotiating position, cynically interprets the fact that not a single country so far has used the complicated procedure as evidence that apparently the poorest countries feel no need for compulsory licensing. At least the German government stands alone with its views in the EU at present.

What is needed is a solution that benefits the poor: countries with no pharmaceutical industry of their own need to be able to issue compulsory licences for essential patent-protected drugs quickly and efficiently. Access to essential drugs is a human right and needs to take precedence over industry’s interest in making profits. There are no legal objections to amend the TRIPS Agreement to this effect; all that is needed is the political will. Civil society will continue to support the developing countries in their bid to secure a solution in their interest.