On 30 January 2017 the World Trade Organization (WTO) announced the first ever amendment to the TRIPS Agreement under the headline WTO members welcome entry into force of amendment to ease access to medicines.
WTO members were celebrating and some media reported the announcement as a major breakthrough. Here is some sobering background to the announcement.
When the WTO ministerial conference in 2001 adopted the Doha Declaration on TRIPS and Public Health it recognised the importance of compulsory licensing for access to medicines. The ministers also recognised that the TRIPS agreement put down significant hurdles for effective use of compulsory licensing for the supply of medicines by countries without sufficient production capacity. This is because article 31(f) of TRIPS restricts compulsory licensing to predominantly for the supply of the domestic market. In other words producing medicines mostly for export using a compulsory licence and being compliant with the TRIPS Agreement was hard to do. As a result countries that relied on importation to give effect to a compulsory licence were at a disadvantage compared to those with production capacity.
The Doha Declaration promised in paragraph 6 an “expeditious solution” to this dilemma. Two years later the WTO adopted the “2003 August 30th decision” also known as the Paragraph 6 system and available for all WTO members to use. It created a permanent waiver to Article 31(f ) that allows WTO Members to issue compulsory licences specifically for export to address needs notified by other countries under the system. Since 2003 several WTO members have implemented the waiver into their own legislation including the European Union (EU). It is noteworthy however that while the system is open to all WTO Members, many high-income countries including the EU opted out of using the mechanism as an importer for their own medicines supply. In 2003 those countries perhaps could not have imagined the high medicines pricing crisis they are facing today.
On 6 December 2005 WTO Members adopted a Protocol amending the TRIPS Agreement to formally include the 2003 August 30th Decision. It is this amendment that went into force on 27 January 2017 and was announced by the WTO on 30 January.
While the amendment is indeed significant – after all it was the first ever amendment to WTO rules and made for public health reasons – in practice not much will change.
In the 14 years the waiver has been in place, it has been used once by Rwanda to order a generic fixed-dose-combination HIV medicine from a Canadian producer. The entire procedure took 4 years and significant civil society involvement to make it happen. At the time both MSF and the company involved called it ‘unworkable’.
An important shortcoming of the system is that in general it can only be invoked on a case-by-case and country-by-country basis. Therefor it is hard to create economies of scale and predictability of market prospects that generic companies need to invest in the development of a product. Here is a good write up of that case.
The system however provides an interesting option for regional economic communities that have a majority of least developed country members. They can bundle demand and place orders and supply of the entire region whether developing countries or LDCs. Today this is relevant for African economic communities only. And this is where the system may give some hope. See here for a write up of how this would work.
However, a straightforward exception under TRIPS Article 30 to supply medicines to a country that has issued a compulsory licence would have been closer to the Doha promise of an expeditious solution.