[A2k] TWN Info: "Milestone" virus/benefit-sharing agreement with shortcomings

Sangeeta ssangeeta at myjaring.net
Fri May 6 15:19:29 PDT 2011

The article below provides a brief summary of the agreed elements of the
Framework agreement on influenza virus and benefit sharing. This agreement
brings to a close negotiations that began in 2007.

This Framework agreement will be adopted at the upcoming World Health

This article was first published by SUNS #7136 dated 26 April 2011. Below is
an updated version of that article.

Sangeeta Shashikant
Third World Network
"Milestone" virus/benefit-sharing agreement with shortcomings
London, 21 Apr (Sangeeta Shashikant)* -- A World Health Organisation working
group has reached agreement on the terms and conditions that would govern
the sharing of influenza viruses and the sharing of resulting public health
benefits including vaccines and diagnostic kits.
The Open-Ended Working Group on Pandemic Influenza Preparedness for the
Sharing of Influenza Viruses and Access to Vaccines and Other Benefits has
had intense and contentious negotiations that were triggered by several
developing countries in 2007.
The agreement concluded early Saturday morning of 16 April at the WHO
headquarters in Geneva is a milestone as it puts in place for the first time
in the WHO a Framework and accompanying contractual instruments known as
"Standard Material Transfer Agreements" (SMTAs) to govern the sharing of
influenza viruses and benefits.
The upcoming WHA that begins on 16 May is expected to adopt the agreed
outcome (see WHO doc. WHA64/8)
The agreement is also precedent setting as it obligates the pharmaceutical
industry and other entities (that benefit from the WHO virus sharing scheme)
to share benefits, when they gain access to influenza viruses of pandemic
However, despite being a landmark agreement, the Framework and the
accompanying SMTAs have several shortcomings.
In particular, the Framework does not go far enough to secure from the
industry and other entities a reasonable level of benefits nor are there
mandatory commitments to share knowledge, technology and know-how with
developing countries on the production of vaccines and other products.
For instance, the $20-30 million annual monetary contribution required of
manufacturers and the 10% of vaccines/anti-viral medicines set aside are far
too little to meet the needs of developing countries (which account for 80%
of world population) in the event of a pandemic outbreak. These benefits
should have been set at higher levels.
Furthermore, the granting of non-exclusive licenses at affordable royalties
or royalty-free to developing countries for the production of vaccines and
other products needed in a pandemic is only a voluntary benefit-sharing
option under the SMTA. This should instead have been listed as a stand-alone
mandatory benefit that all recipients of influenza biological materials
(such as the viruses and parts thereof) have to subscribe, to facilitate the
sharing of knowledge, technology, and know-how, which developing countries
need, to prepare themselves to counter an influenza pandemic.
During the negotiations, the developing countries had sought greater
benefits. However, the outcome was disappointing due to the resistance
against the developing countries' demands by developed countries, in
particular the United States. This resistance significantly diluted the
benefit-sharing obligations and protected industry's profits and
intellectual property.
Negotiations on a Framework began following the 2007 World Health Assembly
when it emerged that WHO's virus-sharing scheme was not regulated and was
inequitable. Developing countries that shared biological materials such as
the viruses that cause influenza faced difficulties in gaining access to
affordable vaccines and anti-virals as well as to technology and know-how to
produce them, while the multinational pharmaceutical industry had access to
influenza viruses and commercially profited from the virus-sharing system
without having to share any benefits with the international community.
Developed countries also gained from WHO's virus-sharing scheme as they had
the resources to stockpile vaccines and other products obtained through
pre-purchase agreements with the manufacturers.
Moreover, it has been revealed that there is a spike in the number of patent
applications covering parts of influenza virus shared in good faith by
affected countries such as Indonesia, Vietnam, China and Thailand with the
WHO virus- sharing scheme, as well as on vaccines, treatments and
diagnostics. It also emerged that several of the laboratories designated by
WHO based in developed countries known as WHO Collaborating Centres were
appropriating for private gain biological materials shared voluntarily by
countries, using the patent system.
Thus, the negotiations were aimed at developing a framework that would
govern the sharing of viruses, infuse transparency and equity into WHO's
virus-sharing scheme by ensuring the fair and equitable terms and conditions
for sharing of virus and of benefits to enable better pandemic preparedness
by developing countries.
However, since the 2007 World Health Assembly Resolution WHA 60.28 that
mandated the setting up of a process to initiate negotiations, developing
countries have faced continuous opposition from developed countries, that
resisted the notion of contractual instruments governing the sharing of
influenza viruses as well as committing entities that gain from the
virus-sharing system to compulsorily contribute fair and equitable benefits.
The resistance of developed countries and their reluctance to engage in
negotiations on the contractual instruments and on benefit-sharing
complicated and prolonged the negotiation process. On several occasions,
particularly following the H1N1 outbreak, developed countries attempted to
end negotiations on the then partially agreed Framework. Such attempts
however failed, as a group of developing countries continued to persist to
demand for a transparent, fair and equitable framework.
At the core of disagreements between developed and developing countries were
issues such as the need for SMTAs to regulate the sharing of influenza
viruses and benefits, the definition of PIP biological materials,
intellectual property and the type of benefits that should be shared, and
whether benefit-sharing is voluntary or compulsory.
The outcome of the negotiations that concluded early Saturday morning of 16
April reveals a compromise on these key issues.
Objective and Scope of the Framework
The agreed objective of the Framework is "to improve pandemic influenza
preparedness and response, and strengthen the protection against the
pandemic influenza by improving and strengthening the WHO global influenza
surveillance and response system ("WHO GISRS"), with the objective of a
fair, transparent, equitable, efficient, effective system for, on an equal
(i) The sharing of H5N1 and other influenza viruses with human pandemic
potential; and
(ii) Access to vaccines and sharing of other benefits."
It was also agreed that the "Framework applies to the sharing of H5N1 and
other influenza viruses with human pandemic potential and the sharing of
[WHO GISRS refers to specific national laboratories designated by WHO. It
comprises National Influenza Centres, WHO Collaborating Centres on
Influenza, WHO H5 Reference laboratories and Essential Regulatory
[The Framework contains sections on principles, objectives, definitions and
use of terms, terms for sharing of influenza viruses of pandemic potential,
the benefit sharing system, as well as on governance and review. The four
Annexes to the Framework contain two SMTAs for the sharing of biological
materials inside and outside WHO GISRS, the Terms of Reference of the
Advisory Group as well as for the different categories of WHO GISRS
laboratories, and guiding principles for the development of Terms of
Reference for current and potential future WHO GISRS laboratories].
Dispute over definition of "PIP Biological Materials"
Developed countries, in particular the United States, attempted to limit the
definition of "PIP (Pandemic Influenza Preparedness) biological materials"
that was used throughout the text of the Framework and the SMTA to "include
human clinical specimens, virus isolates of wild type human H5N1 and other
influenza viruses with human pandemic potential; and modified viruses
prepared from H5N1 and/or other influenza viruses with human pandemic
potential developed by WHO GISRS laboratories, these being candidate vaccine
viruses generated by reverse genetics and/or high growth re-assortment."
They were opposed to any reference to the genetic materials and other parts
of the biological material to be included in the definition. According to
sources, the developed countries were not in favour of a comprehensive
definition of biological materials out of concern that their entities would
be prevented from appropriating parts of the biological materials using the
intellectual property system.
The final agreed definition does include some parts of biological material.
It states: "Also included in "PIP Biological Materials" are RNA extracted
from wild-type H5N1 and other human influenza viruses with human pandemic
potential and cDNA that encompass the entire coding region of one or more
viral genes."
A footnote to the definition of PIP biological materials states:
"OPERATIONAL EXEMPTION: materials shared within the WHO GISRS or with other
laboratories specifically for non-commercial public health uses including
surveillance activities, diagnostic applications, and quality assurance, are
not handled as PIP Biological Materials. Their onward transfer for purposes
other than those specified in the terms of reference of National Influenza
Centers, WHO Collaborating Centres, Essential Regulatory Laboratories and H5
Reference Laboratories is not allowed under this operational exemption."
The impact of this exemption on the use of SMTA for the transfer of
biological materials among WHO designated laboratories is unknown.
The lack of agreement to include a comprehensive definition of PIP
biological material, as well as the inclusion of the operational exemption,
led to the agreement that the experience arising from the use of the
definition of PIP Biological Materials will be reviewed when the Framework
and its Annexes are reviewed in 2016.
Sharing of influenza viruses of pandemic potential
While the Framework does not place a legal binding obligation to share virus
samples, it does however state in Part 5 of the Framework that ³Member
statesŠ.should in a rapid, systematic and timely manner provide PIP
Biological Materials from all cases of H5N1 and other influenza viruses with
human pandemic potential, as feasible² to the WHO Collaborating Centre or
the H5 Reference Laboratory.
The Framework does also recognize that a member state may provide PIP
Biological Materials directly to any other party or body on a ³bilateral
basis² provided the same materials are provided on a priority basis to the
WHO Collaborating Centres and/or H5 Reference laboratories.
Standard Materials Transfer Agreements
The agreed Framework has two contractual instruments. The first contractual
instrument known as "Standard Material Transfer Agreement 1" is to be used
when sharing PIP biological materials within the WHO GISRS, while the second
contractual instrument known as the "Standard Material Transfer Agreement 2"
is to be used when the WHO GISRS shares biological materials with entities
outside the WHO GISRS.
Developing countries have been pushing for SMTAs to be a part of the
Framework as such agreements are a common feature when transfers of
biological materials take place and are critical to bind the recipients of
materials to certain terms and conditions. Failure to comply with the terms
and conditions would trigger a dispute settlement mechanism that involves
mediation and arbitration. Having a SMTA is particularly important to bind
entities outside the WHO GISRS to benefit-sharing obligations.
On the other hand, developed countries have been opposed to the use of
However, as negotiations progressed, developed countries were more amenable
to having SMTA 1 provided that such a contractual agreement did not require
executing an agreement for every transfer of biological material as well as
did not contain arbitration as a mode for settling disputes.
These countries however continued to oppose SMTA 2 till a deal was brokered
between having SMTA 2 and more diluted benefit-sharing obligations with
regard to sharing intellectual property.
Thus, the agreed outcome requires that for PIP biological materials shared
by countries with WHO GISRS and within WHO GISRS, SMTA 1 would be used.
SMTA 1 contains provisions such as: the Recipient will comply with the
agreed Terms of Reference; WHO will be informed about shipments of
biological materials to entities inside and outside the WHO network; the
Recipient shall actively seek participation of scientists from developing
countries from where the influenza viruses and clinical specimens originated
and engage them in preparation of manuscripts for presentation and
publication; the Recipient shall appropriately acknowledge in presentations
and publications, the contribution of collaborators including
laboratories/countries providing clinical specimen or influenza virus with
pandemic potential or reagents using existing scientific guidelines.
With regard to dispute resolution, SMTA 1 contains the options of
negotiation or any other amicable dispute settlement and failing which one
of the Parties may refer the dispute to the (WHO) Director General (DG) who
may seek the advice of an independent Advisory Group with a view to settling
the dispute. The WHO DG may make recommendations to the Parties regarding
its resolution and shall report to the World Health Assembly on such
[The independent Advisory Group comprises 18 members drawn from each WHO
region with a skill mix of internationally recognized policy makers, public
health experts and technical experts in the field of influenza.]
The US was particularly opposed to any provision on dispute settlement that
contained arbitration as a method of resolving disputes, even where parties
could only pursue arbitration when both parties agreed to do so. As a
result, the option of arbitration does not feature in the provision on
dispute settlement.
Proposals to empower WHO as a third party beneficiary to enable it initiate
dispute settlement also did not make it to the final text.
The final outcome also emerged with a novel method of executing agreements.
The terms of SMTA 1 are automatically binding on the WHO GISRS laboratories
on acceptance by such laboratories of their WHO Terms of Reference or on
designation by WHO to become a WHO laboratory. The Agreements do not require
execution by the usual methods such as signature, click-wrap or shrink-wrap.
For entities outside WHO GISRS to gain access to biological materials, such
entities would have to use SMTA 2.
SMTA 2 contains benefit-sharing options as well as other provisions such as
the recipient shall appropriately acknowledge the contributions of WHO
laboratories providing the materials, using existing scientific guidelines.
It further states that the recipient shall only further transfer the
biological materials if the prospective recipient has concluded an SMTA with
the WHO and any such transfers shall be reported to the WHO. It also allows
the DG in exceptional circumstance to transfer biological materials to a
prospective recipient while requesting such recipient to enter into an SMTA
and report to the "Advisory Group" accordingly. It also states that the
recipient may exchange PIP biological materials with any other holder of an
SMTA concluded with the WHO.
On dispute resolution, it states that if a dispute cannot be resolved
through negotiations or other non-binding means of the parties' choice,
disputes shall be subject to binding arbitration on conditions that are
mutually agreed by the parties.

Terms on liability, name and emblem, warranties, duration of agreement,
termination, force majeure, governing law are to be agreed by the parties.

SMTA 2 would be executed by WHO as a party to the agreement with the entity
seeking access to biological materials.
Ensuring the delivery of fair and equitable benefit-sharing by entities
outside of the WHO GISRS was at the heart of the negotiations.
While developing countries pushed for concrete benefit-sharing obligations
to be placed on such entities and towards that end the use of SMTA,
developed countries opposed such an approach, as they were not keen to tie
their industry to compulsory benefit-sharing obligations. Instead, developed
countries pushed for voluntary benefit-sharing commitments by such entities.
The final agreed text reveals compromises on both sides. Entities outside
the WHO GISRS that gain access to biological materials will have to commit
to annual monetary contributions (see paragraph 6.14.3 of the Framework) as
well as to commit to certain benefits from a list of benefit-sharing options
listed in SMTA 2.
Paragraph 6.14.3 of the Framework requires influenza vaccine, diagnostic and
pharmaceutical manufacturers using the WHO GISRS to make an annual
partnership contribution to WHO commencing 2012 of an amount equivalent to
50% of the running costs of the WHO GISRS.
[A footnote adds, "The running costs of the GISRS for 2010 was approximately
USD 56.5 million. The running costs of the WHO GISRS are understood to be a
reference index for the partnership contribution of 50%. Such running costs
may change over time and the partnership contribution will change
accordingly. Such running costs are not to include the partnership
contribution themselves."]
The amount to be contributed by each entity will be based on transparency
and equity, based on their nature and capacities and to be decided by the DG
in consultation with the "Advisory Group" and in collaboration with the
industry. The Director-General is also expected to annually report to the
Executive Board (comprising WHO member states) senior officials on the
In addition to the annual contribution, the SMTA2 also contains a list of
benefit- sharing options for selective commitment by entities outside WHO
GISRS that gain access to biological materials. The text of benefit sharing
options for selective commitment is as follows:
³A. For manufacturers of vaccines and/or antivirals, the recipient will
commit to at least two of the following options:
A1. Donate at least 10% of real time pandemic vaccine production to WHO
A2. Reserve at least 10% of real time pandemic vaccine production at
affordable prices to WHO
A3. Donate at least X treatment courses of needed antiviral medicine for the
pandemic to WHO 
A4. Reserve at least X treatment courses of needed antiviral medicine for
the pandemic at affordable prices
A5. Grant to manufacturers in developing countries licenses on mutually
agreed terms that should be fair and reasonable including in respect of
affordable royalties, taking into account development levels in the country
of end use of the products, on technology, know-how, products and processes
for which it holds IPR for the production of (i) influenza vaccines, (ii)
adjuvants, (iii) antivirals and/or (iv) diagnostics.
A6. Grant royalty free licenses to manufacturers in developing countries or
grant to WHO royalty-free, non-exclusive licenses on IPR, which can be
sublicensed, for the production of pandemic influenza vaccines, adjuvants,
antivirals products and diagnostics needed in a pandemic. WHO may sublicense
these licenses to manufacturers in developing countries on appropriate terms
and conditions and in accordance with sound public health principles.²
³Where Option 5 or 6 is selected, the Recipient shall regularly provide to
WHO information on granted licenses and the status of implementation of the
licensing agreement. WHO shall provide such information to the Advisory
³B. Manufacturers of products relevant to pandemic influenza preparedness
and response, that are not manufacturing vaccines or antivirals, shall
commit to one of the following options: A5, A6, and B1, B2, B3 and B4, as
listed below.²
B1. Donate to WHO at least x diagnostic kits needed for pandemics
B2. Reserve for WHO at least x diagnostic kits needed for pandemics, at
affordable prices 
B3. Support, in coordination with WHO, the strengthening of influenza
specific laboratory and surveillance capacity in developing countries
B4. Support, in coordination with WHO, transfer of technology, know-how
and/or processes for pandemic influenza preparedness and response in
developing countries²
³C. The recipient shall, in addition to the commitments selected under A or
B above, consider contributing to the measures listed below, as appropriate:
€ Donations of vaccines
€ Donations pre-pandemic vaccines
€ Donations of antivirals
€ Donations of medical devices
€ Donations of diagnostic kits
€ Affordable pricing
€ Transfer of technology and processes
€ Granting of sublicenses to WHO²
€ Laboratory and surveillance capacity building²
Intellectual Property (IP)
Disagreements over the issue of IP dominated much of the week-long
negotiations in April.
Developing countries had proposed the grant of licenses to use IP at
affordable royalties as well as for royalties to be waived as a pandemic
becomes imminent, as a stand-alone benefit that all recipients holding IP
must subscribe to. The rationale is to obtain mandatory commitments from the
recipients to share proprietary technology and know-how with developing
country manufacturers.
However, developed countries (in particular the US) were unable to agree to
such a benefit. According to sources, the concern of developed countries was
to safeguard their industries from competition from upcoming manufacturing
of vaccines, anti-virals, diagnostic kits and adjuvants in developing
The final agreement treats licensing of IP as one benefit-sharing option
among many other benefits that a recipient could select as its
benefit-sharing obligation.
Disagreements over IP also emerged during discussions on SMTA 1 that
pertained to the WHO GISRS as developing countries pushed for biological
materials to be kept free of IP. Even on this issue, developed countries
pushed for their laboratories that were designated as WHO laboratories to be
allowed to appropriate (and accordingly privatize) biological materials that
were shared voluntarily by countries for public health purpose.
The final agreed text states: "Neither the Provider nor the Recipient should
seek to obtain any intellectual property rights (IPRs) on the Materials."
Developed countries also supported the addition of 2 more paragraphs in the
SMTA 1, in a bid to protect IP claimed prior to the adoption of the
Framework as well as to ensure respect of IP over technology used for the
generation and/or modification of Materials.
Review and Oversight Mechanism
The final outcome also establishes an oversight mechanism that includes the
World Health Assembly, the WHO DG and an independent 18-member Advisory
Group of internationally recognized policy makers, public health experts and
technical experts in the field of influenza, drawn from three Member states
in each WHO region.
Broadly, the Advisory Group will assist the DG in monitoring as well as
undertake necessary assessments of the Framework in accordance with its
agreed terms of reference. The Advisory Group will also present an annual
report to the Director-General on its evaluation of the implementation of
this Framework that should cover: (i) necessary technical capacities of WHO
GISRS; (ii) operational functioning of WHO GISRS (iii) WHO GISRS influenza
pandemic preparedness priorities, guidelines and best practices; (e.g.
vaccine stockpiles, capacity building); (iv) increasing and enhancing
surveillance for H5N1 and other influenza viruses with human pandemic
potential; (v) the Influenza Virus Tracking Mechanism; (vi) the sharing of
influenza viruses and access to vaccines and other benefits; (vii) use of
financial and non-financial contributions.
The DG in turn will present a report on the work of the Advisory Group
through the Executive Board to the 65th WHA in 2012 for its consideration
including a decision on the Advisory Group¹s future mandate.
The DG is also expected to on a biennial basis inform the WHA through the EB
on the status of and progress on (i) Laboratory and surveillance capacity;
(ii) global influenza vaccine production capacity; (iii) status of
agreements entered into with industry, including information on access to
vaccines, anti-virals and other pandemic material; (iv) financial report on
the use of the partnership contribution; (v) the experience arising from the
use of the definition of PIP Biological Materials.
An critical aspect under this heading is the governance of WHO GISRS
Laboratories. Each category of laboratories are governed by specific Terms
of Reference (TORs) which are attached to the Framework. Review and
amendment of these TORs will have to be reported to the World Health
In addition, member states may bring to the attention of the DG allegations
of non-compliance by the WHO GISRS laboratories with their respective TORs
or the SMTA. Following such as complaint, the DG is expected to review the
circumstance and may discuss with the Advisory Group any appropriate action
in response to the breaches including consider suspending or revoking the
WHO designation of the relevant laboratory.
As the final outcome is based on many compromises, the final text builds in
a review process. The final text states that the "Framework and its Annexes
will be reviewed by 2016 with a view to proposing revisions reflecting
developments as appropriate, to the World Health Assembly in 2017, through
the Executive Board."
Influenza Virus Tracking Mechanism
The Framework also for the first time puts in place a mechanism to track in
real time the movement of PIP biological materials into, within and out of
the WHO GISRS. See https://extranet.who.int/ivtm/ <file://localhost/ivtm>
Genetic Sequence Data
The Framework in Part 5 recognises the need for greater transparency and
access to genetic sequence data. Towards that end the Terms of Reference of
the WHO GISRS laboratories also requires that gene sequences should be
uploaded to a publicly available database in a timely manner no later than 3
months after sequencing is completed, unless otherwise instructed by the
laboratory or country providing the clinical specimens and/or viruses.
Convention on Biological Diversity and Nagoya Protocol
Several hours before agreement was reached on the text at 7 am on 16 April,
intense disagreements broke out between developed and developing countries
over whether the Framework should contain a reference to the Convention on
Biological Diversity (CBD) and its Nagoya Protocol on Access and Benefit
Sharing (recently concluded in November 2010), and how such reference should
be made in the preambular paragraphs of the Framework.

According to sources, during discussions the United States pushed for
language that would suggest that the CBD and the Protocol do not apply to
pathogens while the EU and other developed countries were keen to state that
the agreed Framework prevails over the CBD and the Protocol.
As no resolution could be found, the matter has been left to the 2011
session of the World Health Assembly to resolve when it discusses the
resolution that will adopt the Framework.
The options in the draft Resolution are as follows:
"[PP5[[Consider][recognizes]2 that this PIP Framework is the [international]
specialized access and benefit sharing instrument for PIP Biological
Materials that is consistent with and does not run counter to the objectives
of the CBD and Nagoya Protocol.]"
or "[Recognize that the PIP Framework is the international instrument for
access and benefit sharing arrangements for PIP Biological Materials.]]" +
*Updated as at 6th May 2011

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