Paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health: Elements for a compromise solution
1. Scope in terms of public health problems/diseases and products
a. Public health problems diseases
Views of the key players:
All parties agree that Paragraph 1 of the Declaration should define the scope in terms of public health problems/diseases. (“We recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics”).
Members disagree on whether Paragraph 1 should be read as referring to “grave” public health problems.
Proposal for a compromise:
The solution will apply to “Cases where the gravity of public health problems afflict developing and least developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria, and other epidemics”.
b. Products
Views of the key players:
Members agree that the product scope, as defined by paragraph 6 (which uses the term “pharmaceutical sector”) should cover active ingredients and formulations. Members also agree that the solution should cover both product patents and process patents used in their manufacture.
Certain Members argue that the term pharmaceutical sector implies that other treatment related products, such as diagnostic test kits, should also be covered. Others advocate an even broader coverage including the widest possible range of treatment related products, including medical equipment. There is also a question whether to limit coverage of test kits to diagnostic tests for AIDS.
Proposal for a compromise:
The product coverage would be defined as “patented pharmaceutical products or pharmaceutical products manufactured through a patented process” needed to address the public health problems under 1a. There needs to be a specific understanding the diagnostic test kits are covered.
2. Country coverage
a. Importing Members
i. eligible Members
Views of the key players:
All members agree that, in any event, Least Developed Country Members should qualify as recipients. There is also an understanding that developed Members should not benefit. But there are serious divergences on the extent to which Developing Country Members and Members in transition could be eligible. Certain Members, concerned about the need to ensure predictability, insist on the need for a list of eligible Members. However, many other Members forcefully reject the idea of any pre-established list which would a priori exclude certain Developing Country Members or differentiate among Developing Country Members by means of lists, be they based on income criteria or human development criteria.
Proposal for a compromise:
OECD Members and Members categorised as High Income Economies by the World Bank Country Classification will not qualify as importers under this scheme.
Least Developed Country Members and Developing Country Members categorised as Low Income Economies by the World Bank Country Classification would be eligible importers with regard to patented pharmaceutical products or pharmaceutical products manufactured through a patented process needed to address the public health problems defined under 1.a1. Other Developing Country Members would be eligible importers with regard to patented pharmaceutical products or pharmaceutical products manufactured through a patented process needed to address situations of national emergency or extreme urgency, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics. The eligibility of such countries may be reviewed upon request.
ii. Determination of manufacturing capacity
Views of the key players:
There is agreement that an eligible Member can determine for itself whether it disposes of “no or insufficient manufacturing capacity” (self-election). Some Members argue that this assessment should be done on the basis of objective criteria. Other Members would, subsequently, have the opportunity to rebut the self-election. There is no agreement on the role objective criteria should play and which these objective criteria should be.
Some Members see such criteria as a valuable alternative to establishing a list of eligible members. Others see it as complementary to such a list.
Proposal for a compromise:
Eligible members can make use of the mechanism provided they dispose of no or insufficient manufacturing capacities in the pharmaceutical sector and that it is not feasible to create such capacities in the short term. Least developed country members would automatically be deemed to have no or insufficient manufacturing capacity, without need for any further examination. In order to determine whether they dispose of “no or insufficient manufacturing capacity” the following steps need to be undertaken by the Members concerned:
Does the member concerned dispose of a manufacturing facility which can manufacture active ingredients?
If not, the agreed solution should allow importation of the active ingredient.
If yes: Can it be shown that the specific active ingredient in question cannot, as a technical matter or as matter of available capacity, be manufactured in that facility?
If not, the agreed solution should not apply.
If yes, the agreed solution should apply to allow importation of the active ingredient (but not necessarily the finished product).
Does the member concerned dispose of a manufacturing facility which, if it has access to active ingredients (either domestically produced or imported), can formulate a particular dosage form of final pharmaceutical product?
If not, the agreed solution should allow importation of the final dosage form.
If yes: Can it be shown that the final dosage form of the product in question cannot, as a technical matter or as a matter of available capacity, be manufactured in that facility?
If not, the agreed solution should not apply.
If yes, the agreed solution does apply so as to allow importation of the finished product.
The result of this self-assessment by Members will be notified to the TRIPs Council on a regular basis, for regular review.
b. Producing/exporting Members
Views of the key players
There is growing support, but certainly no consensus, for the view that developed Members should not per se be excluded as producers/exporters. This would ensure that supply can be found for all relevant products at all times. The reasons for the possible exclusion of producers in developed countries seem to be the concern that generic producers could take advantage (through stockpiling or scale economies) to the detriment of the R&D based industry and the risk of price erosion on developed country markets.
Proposal for a compromise:
All WTO Members can qualify as producing/exporting countries. Importing countries are free, if they so wish, to grant preference to producers from developing countries.
3. Safeguards
a. Trade diversion
Views of the key players:
There is a general view that measures should be reasonable and proportional. Some Members advocate stringent measures against trade diversion. Other Members agree with the need for measures against trade diversion, but, at the same time, wonder why the existing safeguards under TRIPs would not be sufficient. In other words: new safeguards going beyond what is already required by TRIPs are rejected.
Certain Members take the view that the type of measures to be taken would depend on the scope of the solution: the broader the scope, the more there is a need for stringent safeguards.
Proposal for a compromise:
The entirety of the production manufactured pursuant to the agreed solution must be exported to the Member/Members which have sought supply under the system. The compulsory license will clearly identify the Member/Members concerned and prohibit export to Members other than the designated Member/ Members. The product will be distributed solely in the designated Member/Members and will not be further re-exported.
An obligation for producing/exporting and importing Members to take the necessary measures to prevent trade diversion, with the understanding that these measures should be proportional to the administrative capacities of the Members concerned as well as to the risk of trade diversion.
A firm obligation for the producing/exporting Member to clearly distinguish the products manufactured pursuant to the agreed solution, through labelling, marking, packaging, and colouring.
In case of substantial or persistent trade diversion, where a Member considers that the producing and or importing Member has not taken adequate measures, the matter shall be discussed in the TRIPs Council.
Members of destination of diverted goods shall take the necessary measures to prevent their import and sale.
b. Notification, transparency and involvement of the right holder
Views of the key players:
All Members agree on the importance of transparency in the process. Members however diverge as to what type of measures need to be taken.
Certain Members argue that prospective importing Members should notify their intention to resort to the agreed solution to the WTO, and possibly also to the WHO. Others have argued that such notification should not be made obligatory upon the importing Member.
One Member takes the view that the Member which has the intention to grant a compulsory licence for manufacture should notify the right holder of its intention. Within a reasonable period of time following this notification, the right holder should be given the opportunity to propose delivery of the needed products at strongly reduced prices. This offer will be made to the designated country which can accept or reject the offer.
Proposal for a compromise:
Prospective importing Members should notify their intention to resort to the agreed solution to the WTO and the WHO, with a view to giving right holders the opportunity to make the needed products available at strongly reduced prices. As provided by 31(b) of the TRIPs Agreement, the Member which has the intention to grant a compulsory licence pursuant to the agreed solution would be required to make a prior effort to obtain a voluntary licence before a compulsory licence is granted.
This obligation would be waived in case of situations of national emergency or other circumstances of extreme urgency in the importing Member.
In such a case, the Member which has the intention to grant a compulsory licence pursuant to the agreed solution will notify the right holder of its intention to grant a licence. Within a reasonable period of time following this notification, the right holder of the product will be given the opportunity to propose delivery of the needed products at strongly reduced prices. This offer will be made to the country of import and notified to the Member intending to grant a compulsory licence.
If the designated country accepts this offer, the authorisation shall not be granted. If no offer is made within a reasonable period of time, or if the designated country rejects the offer on reasonable grounds, the authorisation can be granted.
4. Legal Mechanism
Views of the key players:
Members are divided among proponents of an amendment of Article 31(f) (combined with a transitional solution), an authoritative interpretation on the basis of Article 30 and a waiver.
Proposal for a compromise:
The substance and the effectiveness of the solution to paragraph 6 should be the most important objective of these negotiations. Therefore, all Members should be ready to consider alternative legal mechanisms, provided they are sustainable, workable, balanced, and provide for legal security. A possible compromise could therefore be:
Final comment:
The African Group has requested to examine whether the term “domestic market” in Article 31(f) could be interpreted to cover also regional (trade) arrangements, thus enabling scale economies in applying Article 31 and enabling all Members of a regional agreement to benefit from one compulsory licence (which may pose problems from the point of view of territoriality of patent law). WTO Members are encouraged to look for a solution.
On the other hand, an important issue has clearly been raised by the African group with respect to the role of regional integration agreements. It is for example well understood that the objective of supporting bulk purchasing by developing countries, including those undertaken by regional groups, can be of major importance for reducing the cost of medicines. This question clearly needs further positive consideration in order to examine practical ways and means for facilitating and encouraging such bulk purchases on a regional basis.
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Footnote
1 Least-Developed Country Members will be assumed not to dispose
of manufacturing capacity in the pharmaceutical sector.
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