Heated discussion as TRIPS and health deadline is missed

By Sangeeta Shashikant (TWN), Geneva 1 April 2005)

The World Trade Organisation has for the second time missed the deadline for concluding a 'permanent solution' to the problem facing countries that have no or inadequate drug manufacturing capacity so that they can have access to affordable medicines.

The deadline of 31 March passed without agreement. It was marked instead by aformal meeting of the TRIPS Council which highlighted sharp differences and attimes acrimony between developing countries and major developed countries.

At the end of the meeting, the TRIPS Council chairperson, Ambassador Tony Millerof Hong Kong China said that his successor, Ambassador Choi Hyuck of Koreawould conduct consultations, with the aim of finding a solution before the WTOGeneral Council meeting of 26-27 May, which has thus become the new target date.

The 'permanent solution' requires Members agreeing to an amendment to the TRIPSAgreement, as a follow up to the 'interim solution' contained in the General Council'sdecision of 30 August 2003. That Decision involved a temporary waiver to Article31 (f) of the TRIPS Agreement. The permanent solution is mandated in paragraph 11of the August 2003 Decision.

The original deadline for concluding the amendment was the end of June 2004. Therehave been differences of view, mainly between developing countries led by theAfrican Group, which has submitted a paper with detailed proposals for anamendment to Article 31 (f), and major developed countries that insist that thepermanent solution be based on practically the whole of the 30 August 2003 decisionand the Chairman's statement that was read when it was adopted.

At the 31 March meeting of the TRIPS Council, there were heated discussions overthe content and legal form of the amendment, and especially on the circumstances inwhich the 30 August 2003 decision and statement were made.

'The African Group which makes up a large portion of the WTO's membershipcannot and will not accept an interpretation of paragraph 11 that says the Augustdecision and the Chairman's statement in its entirety should form the amendment'said Ambassador Valentine Rugwabiza of Rwanda, coordinator of the African Group.

The Group said its proposals incorporated the Decision wherever it was appropriate,but it was also necessary to leave out certain parts of the Decision that wereredundant, nor should the Chairman's statement be adopted in the permanent solution This contrasted with the view of the United States and the EU that repeated theirposition that the amendment had to be based on the Decision and the Chairman'sstatement as otherwise a consensus would be difficult.

The African Group's interpretation of paragraph 11 of the Decision receivedoverwhelming support from developing countries. Zambia (on behalf of LDCs),Benin (on behalf of the ACP countries), Argentina, Brazil, India, Philippines, SriLanka and Peru, were in agreement with the African Group's position that theamendment does not need to be a direct transposition of the Decision and theChairman's statement.

They concurred that the ordinary meaning of the sentence 'the amendment will bebased, where appropriate, on this Decision' indicates that only the parts of theDecision that are appropriate are to be used in the amendment.

The Decision is in the form of a waiver of Article 31(f) of TRIPS (which mandatesthat production under compulsory licensing is to be predominantly for the domesticmarket) to enable countries with manufacturing capacity to export essential medicinesto countries with no or insufficient manufacturing capacity.

This Decision and the Chairman's statement contain several conditions and measureswhich exporting and importing countries have to comply with, raising concernsamongst analysts that they are too cumbersome and thus rendering the 'temporarysolution' difficult to operate. Paragraph 11 of the Decision directed the TRIPSCouncil to prepare an amendment to the TRIPS agreement which 'will be based,where appropriate, on this Decision.'

In a statement to the TRIPS Council, Rwanda, on behalf of the African Group,referring to the Terri Shiavo case in the United States, quoted the US President assaying that 'where there are serious questions and substantial doubts, our society, ourlaws, and our courts should have a presumption in favor of life. It should be our goalas a nation to build a culture of life'.

The Rwanda Ambassador said the dedication 'to build a culture of life' should bestronger, more urgent and immediate in the TRIPS Council which has been mandatedto find a permanent solution on how to ensure sustainable supply of essential genericmedicines to the millions of people dying everyday, particularly in Africa. Unfortunately, this dedication and determination seems to be lacking, as four yearshave passed since this issue had been raised but Members were not moving closer tofinding a permanent solution to this problem, said the Ambassador.

She added that the African Group had submitted a proposal on how to incorporate thetemporary waiver into TRIPS, with detailed explanations including why certain partsof the Decision were redundant and should not form any part in the permanentsolution. However, it appeared that some members are not engaging constructivelyin the discussion; for instance, they acknowledge that some parts of the waiver areredundant but to date no concrete proposal had been tabled by any of them.

She refreshed the memory of Members of the circumstances prevailing prior to andat the time the Decision was agreed to. Many options had been proposed by theAfrican Group, which allowed countries to export and import affordable genericmedicines to satisfy the public health needs of people worldwide. However, 'we faceda lot of pressure from some Members which imposed many conditions that weredifficult to meet', she added.

The African Group and many other developing and least developed countries werenever entirely happy with the interim solution and this was made very clear during theTRIPS Council meetings, said the Ambassador. Recalling the understanding that wasreached by Members on the Decision, she said: 'We agreed to this 'interim solution'on the understanding precisely that it was only an interim solution, while discussionsto find a permanent solution would continue. This understanding is reflected inparagraph 11 of the Decision'.

The Chairman's statement, she said, was read when the Decision was adopted moreas an attempt to provide comfort language to assuage the concerns of thepharmaceutical industries that generic manufacturers would gain a strong foothold inthe pharmaceutical market and so this Statement has to be put in its proper context.She also added that during the informal TRIPS Council meetings, some developingand least developed countries' delegates had expressed their reservations over thecontent of the Statement and this clearly indicated that the Statement was neverintended to form any part of the permanent solution.

The African Group said the main reason the Statement was allowed to be read bycountries with reservations is because they felt an urgent need to make a contributionto the success of the Cancun Ministerial Conference. There was a strong feeling thenthat a solution, even if it was an interim one, had to be concluded before Cancun sothat the meeting could focus on other issues and thus have a better chance of success.

It was felt at that time that a Chairman's statement would help facilitate the quickconclusion to the interim solution, but with the understanding that a permanentsolution would require more careful consideration, taking into account all the aspects,including how the mechanism chosen could be operationalized in practice.

Thus, the Chairman's statement should be seen as a facility that served a particularpurpose at that time, mainly to meet the deadline of having a temporary settlementbefore the Cancun meeting. The circumstances no longer exist, she said.

The African Group then sought clarification about a footnote referring to theChairman's statement that it said had been added to the Decision without the expressconsent of the Members. According to the African Group, when the Decision indocument IP/C/W/405 was agreed to, there was no reference to the Chairman'sstatement.

A senior official of the intellectual property division at the WTO, clarified thatMembers had not agreed to include that footnote in the Decision, and that was whythe footnote uses an asterisk (unlike the decision, which uses numbers), and it is inthe introduction, not the decision itself. Therefore, including or excluding the footnotedoes not affect the decision or the legal status of the chairperson's statement, he said.It was included because readers might find the information helpful. According totrade diplomats, the Secretariat official added that the Decision could be reissuedwithout the footnote, if Members wished.

The workability of the Decision in practice was also questioned by the African Group.It referred to a recent African Union Workshop on Patents and Access to Medicinesattended by policy makers from 35 African countries, which had expressed concernthat the Decision imposes several conditions on importers and exporters who wish tomake use of the waiver and which thus may affect the countries' ability to supplygeneric medicines to countries with insufficient or no manufacturing capacity.

The Rwanda Ambassador elaborated that the African policy makers had thusexpressed concerns about the workability of the 'interim solution' and called for 'amore appropriate 'permanent solution' that revises TRIPS and that removes the Article31(f) constraint without placing new constraints so that the export and import ofgeneric medicines can be smoothly facilitated.' They had also expressed support forthe position of the African Group in the WTO in seeking a permanent solution.

The Rwanda Ambassador said it was evident that policy makers at the national levelconsider the interim solution as containing shortcomings that may affect theoperational effectiveness to meet the goal of supplying affordable medicines and soan appropriate permanent solution is urgently required.

Recalling the commitment of Member States in the Doha Declaration 'to interpretand implement the TRIPS Agreement in a manner supportive of WTO Member's rightto protect public health and, in particular, to promote access to medicines for all', theAfrican Group said, 'we are not convinced that the 30 August 2003 decision togetherwith the Chairman's statement as it stands today will fulfill the commitment to protectpublic health and promote access to medicines for all'.

It also expressed the wish to seek a solution that is 'permanent, sustainable, secureand predictable'. The Ambassador said the Group has put forward a proposal basedon the appropriate elements of the decision, complete with detailed explanation aboutthe proposal. The Group urged all Members to share their interpretation of paragraph11 of the Decision and to engage constructively with the intention of resolvingexpeditiously the Doha Declaration's paragraph 6 problem, in favour of supplyingaffordable medicines to those who are most in need.

The African Group was of the view that a permanent solution is within reach ifmembers act in accordance with the letter and spirit of paragraph 11 of the Decision. It hoped that further consultations will finalise the amendment so that a Decision canbe adopted at the General Council meeting in May.

Many other developing countries, including India, Brazil, Philippines, Sri Lanka,Argentina, and Peru expressed agreement with and support for the position adoptedby the African Group.

On behalf of the LDCs, the Ambassador of Zambia also fully supported the statementmade by Rwanda. He said that it was the understanding of the LDC Group that theintention never was that the August decision would be regarded as the 'consensussolution'. It was, and is, only an interim solution' and paragraph 11 is indicative ofthe intention of Member States, he continued.

The group of LDCs also stressed that they always had reservations over the contentand the status of the Chairman's statement and expressed the view that there wasnever an agreement or any kind of understanding amongst Member States that allelements of the Statement will form part of the amendment.

At the height of discussions over how to resolve the paragraph 6 problem, manypromises were made by major developed countries to other Member states, to obtaintheir support for the Decision and the reading of a Chairman's statement, said Zambia,supporting the African Group's version of the circumstances prevailing at that time. He added that 'we were informed that the 30 August decision was only an interimsolution and that discussions to finding a permanent solution by amending TRIPSwould continue,' quoting paragraph 11 of the decision as to how the discussionswould proceed.

The LDCs stressed that the view held by some members, that certain Groups ofcountries wish to reopen the debate that was conclusively ended in August of 2003,simply has no basis and is not supported by paragraph 11 of the Decision. TheZambian Ambassador called on Members to refrain from making statements thatmisinterpret the circumstances prevailing and the understanding reached at the timethe Decision was adopted.

He added that the African Group proposal is consistent with para 11 of the Decisionand that the Group had selected the most appropriate elements of the decision to formthe amendment, and the LDC Group would like to have the proposal discussedpositively and built upon. 'We underline the urgency of the issue, and this is not amatter of procedural debate for us but rather an emergency, on which depends thelives of millions of our people. We urge Members to work for a permanent solutionby the General Council meeting of May 2005.'

Kenya said there were certain things in common between Britain and Africa, in thatBritain treats its written and unwritten laws with equal weight, and Africa similarlytreats the written and unwritten promises equally. The Kenyan delegate asserted thatoral promises made behind the scenes have to be honored and had to be brought backto the table for discussion.

Kenya said that 'we were promised that any problems we had with the Decisionwould be sorted out at the amendment stage.' He requested Members to learn a lessonfrom the words of an African elder, 'Since we can't go back in time and reverse thedamage that has been done, you can take action now, to make it better for the future.'

In contrast to the positions taken by developing countries, the US, EU andSwitzerland repeated their argument that the Decision struck a balance between arange of concerns felt by different groups of members, and was the result of difficultnegotiations, according to trade officials. They said a consensus on an amendmentwill be difficult to achieve if the substance of the waiver is renegotiated. They alsorepeated their position that the General Council Chairperson's statement was part ofthe consensus.

Switzerland said it is currently revising its laws so that its companies can exportgenerics under the Decision and this revision will be endangered if the substance ofthe waiver is going to be renegotiated.

The US representative called the issue of 'unwritten promises' raised by the AfricanGroup as 'perceived promises'. According to trade officials, the US said it wasconcerned to hear unsubstantiated accusations, and as far as it was concerned therewere no behind the scenes promises made, and its negotiators at that time had beentransparent.

In response to this, the Kenyan representative stood his ground, saying that he hadprepared a statement that was to be read at the General Council on 30 August 2003but he was prevailed upon by delegations of the developed countries not to do so. Headded that they had made promises to his delegation and high officials in his capitalto reassure them, so that he would not have to make the statement he had prepared,at the General Council meeting when the Chairman's statement was read out and theDecision adopted.

The Kenyan delegate also made reference to a conversation in a lift and phone callsbetween capitals.

Kenya also made reference to some parts of a statement made by Canada on the eveof the adoption of the Decision in August 2003. Kenya said that the Canadastatement might remind Members of the pressures facing the developing countries,particularly the African Group at that time.

At an informal meeting of the Heads of Delegations on 29 August 2003, Canada said,'The final thank you goes to all my African colleagues. It was their countries andtheir citizens who were always recognized as the primary beneficiaries of theDeclaration on TRIPS and Public Health. It was their people who had the most need. And yet, they have demonstrated remarkable patience with us, on such a 'life anddeath' issue. I am not sure many of us, in similar circumstances, would have actedas honourably.'

This statement made by Canada that it is indeed an issue of 'life and death' has beenemphasized in the African Group's present statement, said Kenya.

The meeting ended with no agreement on the amendment to the TRIPS Agreement.The chairperson Tony Miller said that consultations would be carried on by hissuccessor Ambassador Choi Hyuck with the aim of reaching agreement by theGeneral Council meeting of 26-27 May 2005, as proposed by the African Group.