Substantive and Procedural Elements of a Report to the General Council under Paragraph 6 of the Declaration on the TRIPS Agreement and Public Health

Non-Paper by South Africa

I. INTRODUCTION

1.Under paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (the "Declaration"), WTO Members ("Members") instructed the Council for TRIPS to find an expeditious solution to the problem confronting Members with insufficient or no manufacturing capacities in the pharmaceutical sector which could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement.

2.Paragraph 6 of the Declaration must be construed in light of the Declaration as a whole, particularly paragraph 4 thereof, under which Members affirm that the TRIPS Agreement "does not and should not prevent Members from taking measures to protect public health" and that the TRIPS Agreement "can and should be interpreted and implemented in a manner supportive of Members' right to protect public health and, in particular, to promote access to medicines for all".

3.There are several elements to finding an expeditious solution. There are elements relating to substantive conditions that may be applied by importing and exporting Members in respect to compulsory licences in the contexts identified by paragraph 6. There are elements relating to processes or procedures that may be followed by importing and exporting Members in those contexts. Members must also determine what legal instrument will be most effective in providing the expeditious solution that the Council for TRIPS was instructed to report on to the General Council before the end of 2002. This non-paper addresses the substantive and procedural elements of the solution. The issue of the most effective legal instrument will be addressed in a subsequent proposal.

Substantive elements

4.Scope of diseases: Paragraph 1 of the Declaration does not in any manner qualify "public health" in paragraph 4; neither does it limit the scope of diseases that may be addressed when finding an expeditious solution to the problem referred to in paragraph 6. There must therefore be no a priori exclusions regarding diseases that may be addressed by importing and exporting Members or the products in the pharmaceutical sector used to address public health. It is neither practicable nor desirable to predict the pharmaceutical product needs of Members desiring to protect the public health by promoting access to medicines for all.

5.Scope of Products: "Product[s] in the pharmaceutical sector" must be understood to include all medicines and vaccines, including active pharmaceutical substances used in the prevention and treatment of disease and health care, as well as diagnostic products and products used to administer medicines and vaccines.

6.Beneficiary Members: There must be no a priori exclusion of Members with insufficient or no manufacturing capacity that may benefit from the importation of products in the pharmaceutical sector. It must be within the discretion of each Member to determine whether it has insufficient or no manufacturing capacity with respect to a product(s) in the pharmaceutical sector. Such determination should take into account the circumstances confronting the Member, as evaluated by that Member. Such determination should not be based on criteria such as level of national income or economic development. Members at all income levels and levels of economic development may encounter situations of insufficient or no manufacturing capacity with respect to a product(s) in the pharmaceutical sector. Paragraph 6 addresses Members with insufficient or no manufacturing capacities in the pharmaceutical sector. It does not refer to the categorization of Members based on levels of income or other criteria unrelated to manufacturing capacities.

7.Voluntary Exclusion as Beneficiary Member: A Member may elect not to benefit from the importation of products in the pharmaceutical sector to address public health needs under Paragraph 6.

8.Exporting Members: There must be no a priori exclusion of Members that may act as sources of supply under Paragraph 6.

9.Safeguards: Measures to prevent illicit diversion should neither place unnecessary nor onerous burdens on countries nor render the products in the pharmaceutical sector supplied under paragraph 6 less accessible.

II. PROCEDURAL ELEMENTS

10.Notifications of and Negotiations with Patent Holders: When there is a patent in the importing Member, that Member shall follow the procedures prescribed by Article 31(b) of the TRIPS Agreement for granting a compulsory licence.

11.Remuneration: Procedures to determine adequate remuneration should not be used to inhibit the expeditious export and import of products under paragraph 6.

12.Transparency: Notification procedures should neither be burdensome nor constitute an inhibition to the expeditious action under paragraph 6.

III. OTHER ELEMENTS

13.Regional Arrangements: Article 31(f) of the TRIPS Agreement refers to predominant supply of the "domestic market" of a Member under compulsory licence. "Domestic market" should be understood to include not only the territory of a single Member granting a compulsory licence, but also the territory of any regional arrangement in which that Member participates.

14.Permanence: Without prejudgement as to the legal instrument proposed to give effect to the recommendation to the General Council, it is imperative that the "expeditious solution" have a permanent, legally secure, and predictable character.

15.Transfer of Technology and Capacity-Building: Technology transfer shall remain an integral part of any solution under paragraph 6, in line with Article 7 and Article 66.2 of the TRIPS Agreement and paragraph 7 of the Declaration. Developed Members shall undertake to adopt measures to build sound technological bases in developing and least developed Members and which would immediately operate to transfer technical skills and products necessary for sustainable technological innovation and sustainable domestic production of pharmaceutical products to meet the public health needs of developing and least-developed Members.

16.Non-prejudice to Existing Rights: The expeditious solution under paragraph 6 shall be without prejudice to rights Members presently have under the TRIPS Agreement or the flexibilities affirmed in the Declaration.