[A2k] Statement of the United States to WTO TRIPS Council on the Paragraph 6 System
thiru at keionline.org
Thu Nov 4 00:06:54 PDT 2010
Statement of the United States to WTO TRIPS Council on the Paragraph 6
The following statement was delivered by USTR at the WTO Council for
TRIPS Annual Review of the Paragraph 6 System on Wednesday, 27 October
Statement of the United States
Agenda item F, Annual Review of the Paragraph 6 System
We are pleased to be here today to participate in the annual review on
the implementation of paragraph 6 of the Doha Declaration.
The TRIPS Agreement provides an important balance between providing
incentives to research and develop new medicines and promoting access
to existing patented medicines. According to the Doha Declaration on
TRIPS and Public Health of 2001, the TRIPS Agreement “does not and
should not prevent members from taking measures to protect public
The United States is a global leader on improving public health. U.S.
funding for global health has increased significantly over time,
particularly in the last decade; funding more than doubled in fact
between FY 2004 and FY 2008, reaching $9.6 billion in FY 2008. In
2009, the United States was the largest donor in the world for the
global response to HIV/AIDS, accounting for more than half of
disbursements by governments. In fact, without U.S. funding,
international AIDS assistance from donor governments would have
significantly declined between 2008 and 2009.
As part of the U.S. Government’s global health programming, we are
committed to promoting equitable access to safe and effective
medicines of assured quality around the world. We are also fully
committed to helping countries that are experiencing public health
crises find real and comprehensive solutions to these situations.
As one element of these efforts, the United States strongly supported
the General Council’s decision of August 2003, to implement the Doha
Declaration on TRIPS and Public Health to allow drugs to be exported
under a compulsory license under the terms set out in that decision
and the accompanying Chairman’s Statement. The United States also lent
strong support to the General Council’s Decision of December 6, 2005,
to amend the TRIPS Agreement and make permanent the system and
appropriately preserve reference to the Chairman’s Statement. Now, it
should be recalled that the Doha Paragraph 6 Solution was the result
of robust discussions and attracted the consensus of the Members;
other prior proposals were left behind. In fact the United States was
the first Member to notify its acceptance of the amendment.
Mr. Chairman, the paragraph 6 system is intended to be one tool to
assist in promoting access to medicines and provides an important
failsafe in our work to improve access to medicines. This safety
valve, however, can be only one tool.
In the past, some delegations have shared their view that the
paragraph 6 system has been used sub-optimally and that an analysis of
this possibility is needed. As we have affirmed at previous meetings
of this Council, this annual review was precisely the place that WTO
Members intended reviews of the operation of the paragraph 6 system to
be conducted, and this is the place where Members – who are the users
of this inter-governmental system – should share their experiences
regarding any concerns arising out of the operation of the paragraph 6
In that connection, the United States is pleased to participate in
this discussion today. We have listened with great interest to the
presentations provided by other Members on the topics that have
previously been discussed.
As in the past, we have taken note of the importance that some
delegations have attached to the fact that the paragraph 6 system has
been used as such in one instance.
Concerning the number of actual uses of the paragraph 6 system, we
submit that this number is not the right metric to measure the
effectiveness. We must evaluate the results that matter – i.e., we
need to look at the extent to which medicines are reaching the
affected populations. In that connection, the number of times that
Members have relied on this safety valve mechanism does not simply
provide the right focus.
Instead, the paragraph 6 system should be viewed in its proper, larger
prism. This principle is reflected in paragraph 2 of the Doha
Declaration, and that wider national and international action is where
we would like to build today.
As an initial matter, as mentioned by our colleagues at the WHO
Secretariat, we should not lose sight of the fact that the majority of
the drugs on the World Health Organization’s Model List of Essential
Medicines are off-patent.
Additionally, it is also important to recall that the paragraph 6
system’s development was one element of a larger international
exchange of ideas that WTO Member governments, the donor community,
companies, and other stakeholders have had – and are having – in order
to improve access to medicines.
And as I will discuss shortly, it is that work that has led to real
and measurable progress over the past decade in improving access to
medicines. Further, it has led to partnerships – between governments,
between governments and stakeholders, and between stakeholders
And today I would like to share information on some of those efforts
as part of the annual paragraph 6 review. First, I will discuss some
of the results that this exchange of ideas have resulted in, and
second, I will also discuss some long-running problems that have
hampered the efforts to address the issues as well as solutions to
these problems that are emerging.
In our discussions with stakeholders across the spectrum, we have
consistently heard that access to medicines is in fact being improved
through numerous means.
These means include developed country policies and programs that place
greater emphasis on building sustainable capacity in the public
sectors of our partners and at their national and community levels to
provide basic services over the long term.
These means include efforts to expand research and development of
innovative drugs and production capacity for both innovator and
generic drugs in developing countries.
These means also include donations of health products by WTO Members,
the private sector, and international bodies, and, finally, tiered
pricing, bulk purchase mechanisms, innovative licensing models and
other measures by innovative and generic companies and multilateral
In fact, as one example of such means, the United States through our
National Institutes of Health (NIH) was the first patent holder to
share its patents with the newly established Medicines Patent Pool
Foundation. The initial contribution by the NIH and its co-patent
owner the University of Illinois at Chicago embodies these commitments
and takes an important step toward making affordable and appropriate
HIV medicines available to patients around the world. It builds on our
President’s previous commitment to support humanitarian licensing
policies to ensure that medications developed with U.S. taxpayer
dollars are available off-patent in developing countries.
Let me next address some of the measures undertaken by innovative and
generic companies to meet the needs to LDCs and others.
First, in many cases, innovator companies simply do not apply for
patent protection in many developing countries.
Second, there has been widespread tiered pricing of pharmaceuticals
tied to individual and sub-regional developing country markets. Tiered
pricing is linking the price of a pharmaceutical in a market to what
the consumer or purchasing government can afford to pay. While tiered
pricing is not a new strategy, its frequency of use has dramatically
increased in the past decade. For example, we understand that Bristol
Myers Squibb, partnering with many Health Ministries, announced a
number of years ago that it would make all of its HIV medicines
available at no-profit prices in sub-Saharan Africa. We also
understand that in 2005, the company announced that pediatric
formulations would be priced below cost, in order to further reduce
barriers to provide access to this treatment. We understand that other
companies, such as GlaxoSmithKline have a similar offer, wherein
certain antiretroviral drugs are offered at not-for-profit prices in
64 different countries. Further, a number of other companies are
reportedly working together to provide a “single tablet a day” product
at significantly reduced prices.
These examples make clear that private actors are improving access to
medicines in a manner that simply wasn’t present five to seven years
Next, another action undertaken by patent owners are partnerships with
generic manufacturers. Many patent owners report that they have
partnerships with generic manufacturers to make their products more
generally available. And they rely upon these generic manufacturers,
often in developing countries, to scale up their manufacturing.
One example of this type of partnership is that between Gilead, an
innovative pharmaceutical company, and Indian and South African
generic manufacturers which has increased the number of people
receiving its various treatments from 100 people in 2003, the time of
the Doha declaration, to 700,000 people in 2010. Gilead has entered
into licensing agreements with these pharmaceutical companies to
transfer its patented technology for the formulation of the medicine.
These treatments address HIV infection and chronic Hepatitis B in
With respect to its Indian partners, Gilead has entered into licensing
agreements to produce and distribute a generic version of the drug to
95 low-income countries much earlier than otherwise would be possible,
due to India’s production capacity and capable generics industry.
The licensing revenue from these agreements is also reinvested to fund
medical education, safety reporting, and product registration/
marketing approval in destination markets.
This is only one example of an increased collaboration between
innovative and generics companies, especially through non-exclusive
voluntary agreements. A number of companies around the world have
granted licenses to generic pharmaceutical companies to make generic
versions of their drugs. We understand that licensing contracts are
being explored by pharmaceutical companies in Bangladesh, Ethiopia,
Kenya, Tanzania and Zimbabwe, as well as other countries.
Another example of a partnership between innovators and generics is
the global Meningitis Vaccine Project (MVP). The MVP was established
in 2001, using technology licensed by the U.S. National Institute of
Health (NIH). In 2001 and 2002, the MVP approached various vaccine
manufactures, seeking a manufacturer who could agree to manufacture
the vaccine for 50 cents a dose, the price that NIH had been told by
countries in Sub-Saharan Africa was necessary for the vaccine to be
affordable in their marketplaces. The Serum Institute of India
accepted the challenge, and after about eight years of work, began to
ship the vaccine to Mali, Burkina Faso, and neighboring Niger last
This eight year lag does go to the larger point – the procurement of
medicines is a long process, so that any measure of length of
obtaining a license under the paragraph 6 solution should take this
The results of this collaboration speak for themselves. With respect
to this MVP project, over a recent 17-day period, over 1 million
people were vaccinated. The target is to eventually distribute 40
The Gilead and MVP approaches are just two examples of partnership
trends that are increasing and delivering real results. And once
again, these approaches did not exist 10 or 15 years ago. There are
many such cutting edge partnerships that are promoting access to
medicines. Other similar partnership trends that have been reported to
• An increase in the number of research collaborations targeting
areas of need; and
• Increased voluntary sharing of intellectual property, such as
“compound libraries” for research purposes. For example, one company
has launched a knowledge pool, now run independently by a third party,
that places approximately 80 patent families in a pool to help others
develop new medicines for neglected diseases.
In addition to collaboration with innovator companies, the generic
drug industries have also had a significant role to play in improving
access. For example, generic companies are engaging in more research
activities for adapting existing products to the needs of developing
countries as well as assisting in capacity advancement in poor
Many of these partnerships also provide jobs, access to doctors and
nurses, and training for medical staff, schools and hospitals.
We must underscore that the ability to patent the invention is a
critical piece of ensuring that not only that there is an incentive
for developing the medicine, but also that its benefits can be shared
widely. The development of new, life-saving drugs is a risky and
expensive process, and it is necessary to provide incentives for the
private sector to undertake this effort. Intellectual property rights
are essential to provide this incentive so that new drugs can be
brought to the market.
Moreover, patent systems can provide important incentives to reward
innovators who identify ways to adapt medicines to many different
challenging circumstances, such as a lack of refrigeration or a need
for more patient-friendly ways of administering a drug that may be
particularly relevant in developing country markets.
As we have just discussed, there are many actors working to promote
access to medicines. The intellectual property system plays a critical
role in assisting this effort. But time has shown that intellectual
property rights are often the determining factors in the larger issue
of access to medicines, as has sometimes been asserted.
I would like to review for a few moments some of the more fundamental
problems that hamper access. I would also like to highlight some
solutions that have been found in various contexts.
Many complex factors hamper access to medicines in developing
countries, including sub-optimal procurement systems and poor
distribution networks for medicines, caused by lack of basic
infrastructure, hospitals, clinics and healthcare professionals, among
The goal of equitable access to medicines is not achievable or
sustainable without fostering improvements to the health systems
themselves to ensure that patients can actually receive and be
administered the drugs.
Additionally, systemic problems and taxes and tariffs on imported
medicines, and a lack of cold-chain storage, are often overlooked
problems in many multilateral discussions.
Let me elaborate; and some of these have already been touched upon by
our colleagues in the WHO Secretariat.
In some cases, taxes or tariffs are levied on products being supplied
at cost or on donated products, the cost of which is passed directly
Often health care is delivered far from the community being served.
Weak drug procurement and delivery systems are another barrier to
access to medicines. Lack of transportation and infrastructure also
make it difficult for a patient to go to the doctor as well as for the
distribution of pharmaceutical products. Backlogs, regulatory
redundancy, as well as other non-tariff barriers also hinder the
distribution of both generic and innovative drugs where they are most
Finally, if the healthcare system is flooded with counterfeit
products, true access is not achieved. Because of weak regulatory
regimes and global criminal networks, counterfeit and substandard
medicines, harm or kill sick people across the globe, with the
developing world disproportionately affected. In fact, the WHO
estimates that “in over 50% of cases, medicines purchased over the
Internet from illegal websites that conceal their physical address
have been found to be counterfeit.”
These are all problems that can be solved. Many of the issues will
require action on the parts of both developed and developing
countries. It is clear, however, that without accounting for the full
range of problems that exist, we cannot make the improvements that
will foster improved access.
And now, I would like to discuss a few of the solutions with which the
United States is involved
On September 22, President Obama announced a new U.S. global
development policy – the first ever for a U.S. Administration. Through
the policy, President Obama has made clear that sustainable
development is a long-term proposition, and progress depends
importantly on the choices of political leaders and the quality of
institutions in developing countries. Where leaders govern
responsibly, set in place good policies, and make investments
conducive to development, sustainable outcomes can be achieved. Where
those conditions are absent, it is difficult to engineer sustained
progress, no matter how good our intentions or the extent of our
Significantly, the policy places greater emphasis on building
sustainable capacity in the public sectors of our partners and at
their national and community levels to provide basic services over the
long-term. The United States will continue to provide medicine,
emergency food aid, humanitarian relief and other assistance where it
is desperately needed. But we will also strive to help increase the
capacity of our partners to meet those needs by investing in systemic
solutions for issues such as service delivery and public administration
President Obama’s six-year, $63 billion Global Health Initiative
(GHI), focuses on sustainable service delivery where the needs are
greatest and the conditions are right to build effective health
service delivery systems.
As to shortages of skilled health care professionals, the U.S.
Government, as well as many private companies, has undertaken
significant efforts to improve healthcare systems in developing
countries. In the President’s Emergency Plan for AIDS Relief (or
PEPFAR) and the President’s Malaria Initiative, the U.S. is training a
significant number of health workers in support of sustainable health
systems. We are also a leader in the implementation of task-shifting
initiatives in Africa.
The PEPFAR, the largest component of the GHI has, since its inception,
promoted access to medicines and other products through many means,
including by improving supply chain management. This approach is
saving lives – through PEPFAR, 2.5 million people are being supported
for life-saving anti-retroviral treatment.
Additionally, the PMI is working to improve access to malaria
medicines through their procurement and distribution in the 15 PMI
focus countries (Angola, Tanzania, Uganda, Malawi, Mozambique, Rwanda,
Senegal, Benin, Ethiopia, Ghana, Kenya, Liberia, Madagascar, Mali, and
Zambia), distributing over 80 million treatments.
With respect to government tariffs, as part of the WTO NAMA
negotiations, Switzerland, Singapore, the United States, and Chinese
Taipei have proposed an Enhanced Healthcare initiative for members to
jointly reduce or eliminate tariffs on medicines and key medical
equipment and supplies. We hope that other members will join in this
effort, as it will result in lower medicine prices, and benefits to all.
Similarly, the use of transparent, competitive and non-discriminatory
procurement procedures and practices in procurement of pharmaceuticals
will provide governments with more choices from a broader array of
suppliers that can mean lower prices and more effective use of limited
In closing, access to medicines is a complex issue that requires a
multifaceted approach and often multi-sectoral approach that works to
address all aspects of the situation in a meaningful way. The
paragraph 6 system must be located in this larger prism. Today, we
have shared our experiences on approaches that are producing results.
We hope that this helps inform Members’ consideration of this issue.
These approaches are an illustration that we should not focus on the
single reliance on paragraph 6 as a proper or meaningful gauge of the
operation of the paragraph 6 system.
Thank you, Mr. Chairman.
Knowledge Ecology International (KEI)
thiru at keionline.org
Tel: +41 22 791 6727
Mobile: +41 76 508 0997
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