[Ip-health] WTO TRIPS Council (June 2015): LDC Group Presentation on the Extension of the Decision on Pharmaceutical Products

Thiru Balasubramaniam thiru at keionline.org
Wed Jun 10 08:43:44 PDT 2015

WTO TRIPS Council (June 2015): LDC Group Presentation on the Extension of
the Decision on Pharmaceutical Products


The LDC Group delivered the following statement on Wednesday, 8 June 2015
during WTO TRIPS Council discussions on their request on the extension of
the decision on pharmaceutical products.


Mr. Chairman,

I make this presentation on behalf of the LDCs group. We thank you for
calling this meeting and for your report.

During the last Council meeting our coordinator Bangladesh submitted a duly
motivated request on the extension of the transition period under Article
66.1 of the TRIPS Agreement for the Least Developed Country members with
respect to Pharmaceutical Products and for Waivers from Obligations of
Article 70.8 and 70.9 of the TRIPS Agreement. That request is reflected in
document IP/C/W/605. Today is the first opportunity for the Group to
formally present this request to you Mr. Chairman and all distinguished
colleagues attending the Council.

Mr. Chairman,

It will be recalled that the current pharmaceutical transition period,
which is set to expire on 01 January 2016 is comprised of two WTO
decisions, TRIPS Council Decision, IP/C/25, dated 01 July 2002, addressing
pharmaceutical product patent and data protections; and General Council
Decision, WT/L/478, addressing market exclusivity rights under Article
70.9. This 2002-2016 transition period was specifically without prejudice
to the right of LDCs to seek and obtain further extensions. This special
pharmaceutical transition period was first agreed upon in Paragraph 7 of
the Doha Declaration on the TRIPS Agreement and Public Health in
recognition of the gravity of the public health problems afflicting LDCs
and their acknowledged right to maximum flexibility to take steps to ensure
access to medicines for all.

Mr. Chairman,

The classification of LDCs is contingent on a number of key human
development indicators including levels of poverty, literacy, infant
mortality and economic vulnerability. There are currently 48 countries
which meet this criteria. 34 of these countries are members of the WTO.
Four countries have so far graduated out of this category, namely: Botswana
in 1994; Cape Verde, in 2007; Maldives in 2011 and Samoa in 2014. To try
and illustrate our point and put things into perspective, we would like to
invite the Council on this short trip of numbers.

The LDC Report of 2014, prepared by UNCTAD entitled: Growth With Structural
Transformation: A Post-2015 Development Agenda, observed that in 2013, the
LDC current account deficit reached US$40Bn. According to the market access
study undertaken by the WTO in 2014, the LDCs share in world merchandise
trade in 2013 was at 1.24%, with a staggering deficit of US$60.6 billion.
Our participation in world services exports was a paltry 0.68%. Investment
going to LDCs is not any different. According to the 2013 UNCTAD Investment
Report, inflows to the LDCs represented only 1.9% of global inflows.
According to the 2013 UNIDO Report, the share of manufacturing value added
for LDCs actually declined from 2% in 1992 to 1% in 2012.

That not withstanding in 2013, UNCTAD also reported that the population
growth is projected to double to 1.7 billion by 2050. Many LDCs are now at
a critical stage of development whereby population growth is high, and the
socio-economic challenges are massive. 400m of our people, i.e, 46% of our
population, live below the poverty line (USD 1.25 a day). They
disproportionately suffer health?risks associated with poverty such as
malnutrition, unsafe water and poor sanitation. About 50% of health
expenditure in LDCs is also out of pocket. LDCs are the world’s most
impoverished countries with the weakest technological capacity.

It was with this in mind that the framers of the TRIPS Agreement recognized
in the Preambular paragraphs of the Agreement, the special needs of the
least-developed country Members in respect of providing MAXIMUM flexibility
in the domestic implementation of laws and regulations in order to enable
them to create a sound and viable technological base.

Mr. Chairman,

This now brings us to the substance of why we are here. Our request is
premised on Article 66.1 of the TRIPS Agreement. It states as follows: “In
view of the special needs and requirements of least-developed country
Members, their economic, financial and administrative constraints, and
their need for flexibility to create a viable technological base, such
Members shall not be required to apply the provisions of this Agreement,
other than Articles 3, 4 and 5, for a period of 10 years from the date of
application as defined under paragraph 1 of Article 65. The Council for
TRIPS shall, upon duly motivated request by a least-developed country
Member, accord extensions of this period.”

As we have highlighted in our request, access to affordable pharmaceutical
products is a prerequisite, to deal with the numerous public health
challenges facing LDCs. LDCs are home to some of the world’s most
vulnerable people and bear considerable health burdens. They face growing
burdens of neglected, infectious, and chronic non-infectious diseases.
Because of market failure in the patent-based innovation system, diseases
that mainly affect poor people in lower income countries – so-called
neglected diseases, including Ebola – still do not have many treatment

In 2011, some 9.7 million of the 34 million people living with HIV
worldwide, lived in LDCs. 4.6 million were eligible for antiretroviral
(ARV) treatment in accordance with the 2010 World Health Organization HIV
treatment guidelines, however only 2.5 million were receiving it.

In 2013, the situation was different. UNAIDS and UNDP observed in their
statement of support issued on 21 May, that people living with HIV who are
not receiving anti retroviral therapy has reduced from 90% in 2006 due to
the effective use of the transition period to scale up access to treatment
for HIV and its co-infections by importing or manufacturing lower-cost
generic medicines. However the treatment gap remains massive. At the end of
2013, 63% of the 10.7m people living with HIV in LDCs do not have access to
antiretroviral therapy.

According to UNAIDS, “there is concern that without extension of the
transition period, access to antiretroviral therapy and other key medicines
in LDCs will face real challenges.” Further, that the situation regarding
availability and pricing of HIV-related medicines will be more complex than
the situation in 2001 when the Doha Declaration was adopted….and the
progress that has been made to improve access to HIV-related medicines in
these countries will be reversed.”

LDCs also bear increasing health burdens of Non Communicable Diseases
(NCDs) than in higher income countries. According to a WHO Status Report of
2010, on non-communicable diseases, in the African Region, a region with
many LDCs, the prevalence of NCDs is rising rapidly and is projected to
cause almost three-quarters as many deaths as communicable, maternal,
perinatal, and nutritional diseases by 2020, and to exceed them as the most
common causes of death by 2030. In the specific case of cancer, data from
low-income countries suggests that cancer incidence is expected to rise by
82% from 2008 to 2030, whereas in high-income countries incidence is
expected to rise at a much lower rate of 40%, in part due to widespread
access to vaccines and medicines.

The UN Human Rights Council adopted Resolution A/HRC/23/L.10/Rev.1 of 11
June 2013 on access to medicines in the context of the right of everyone to
the enjoyment of the highest attainable standard of physical and mental
health; the 2011 UN declaration on HIV and AIDS; the WHO Global Action Plan
for the Prevention and Control of NCDs 2013-2020; and the 2012 RIO+20
United Nations Conference on Sustainable Development have all urged States
to promote access to medicines for all, including through the use, to the
full, of the provisions of the Agreement on Trade-Related Aspects of
Intellectual Property Rights which provide flexibility for that purpose.
The extension of the transition period, therefore, is critical to enable
LDCs to be able to import affordable generic medicines as well as to
strengthen local production capacity.


Mr. Chairman, upon submission of this request, we engaged the partners in
bilateral consultations, both developed and developing. The objective was
to understand their concerns with the view to explaining our request. A
number of issues were raised, but we would like to address four of them,
which seemed common to almost all the meetings we had. (i) What is the
relationship between the 2013 General transition period and the 2002
pharmaceutical decision; (ii) Whether or not, LDCs had utilized the
pharmaceutical transition period afforded by Paragraph 7 of the Doha
Declaration and as adopted by the TRIPS Council in 2002; (iii) the
rationale behind the request for waivers from Articles 70.8 and 70.9; and
the (iv) the question of duration.


Mr. Chairman,

It will be recalled that in 2001, WTO Members agreed to Paragraph 7 of the
Doha Declaration on TRIPS & Public Health, which accorded LDCs a specific
pharmaceutical transition period for 15 years until 2016. In 2002,
Paragraph 7 of the Doha Declaration was formally adopted as a TRIPS Council
decision (IP/C/25). It is important to recall that this specific
pharmaceutical transition period was granted to supplement the general
transition period that continued until 2005. It was adopted in recognition
of the gravity and magnitude of public health challenges afflicting LDCs.
Clearly it was also recognized that unlike other intellectual property,
pharmaceutical products, and access to such products, deserve special
attention and measures, as it is a matter of life and death. It is for this
reason, that even the duration granted for the pharmaceutical transition
period was much longer than the general transition period at the time.

It is important to stress that the negotiations and the decision of the
2013 general transition period, did not give any special consideration to
the matter of pharmaceutical products. This is evidenced by the 2013
decision text which states that it is “without prejudice” to the 2002
pharmaceutical decision and the right of LDCs to seek further extensions.
This phrase can only be interpreted, in good faith, as the WTO Members’
confirmation that the 2013 general extension does not affect or preclude
the right of LDCs to request for further extensions of the 2002
pharmaceutical transition period. LDCs consented to the text of the 2013
decision on the basis of this understanding. Their position would have been
different if any Member had expressed at that time the view that LDCs would
have no right to such further extensions.

A specific decision on pharmaceutical products is critical to address the
public health needs of LDCs. Unlike the 2013 extension, which is general,
the 2002 pharmaceutical extension specifically mentions that “with respect
to pharmaceutical products”, LDCs do not have to “IMPLEMENT OR TO APPLY”
patents or test data protection or “TO ENFORCE” such “rights”. The
specificity and clarity of Paragraph 7 of the Doha mechanism and the 2002
pharmaceutical decision has provided LDC governments, donors and suppliers,
the certainty to confidently supply and procure affordable generic
medicines. Thus it is without a doubt that a specific pharmaceutical
decision is important to enable procurement of affordable generic medicines.

The 2002 pharmaceutical extension decision does not have any real or
perceived conditionalities whatsoever. It provides certainty among policy
makers with regard to the application of the transition period by LDCs.
Given the critical importance of pharmaceutical products and the known
concerns of the effects of intellectual property on access to medicines,
LDCs need an unconditional decision as granted in 2002 that is explicit
that there is no obligation to implement, apply or enforce patents and test
data obligations with respect to pharmaceutical products.

Mr. Chairman, for the reasons we have described about the particular health
challenges faced by LDC populations; what the LDC Group is requesting of
the TRIPS Council is merely a continuation of the Para 7 understanding in
Doha. The 2013 decision does not preclude the need for a specific extension
addressing the issue of pharmaceutical products.


Yes. The 2002 TRIPS Council Decision has been used extensively by LDCs and
has been invaluable in assisting LDCs to access affordable pharmaceutical
products. According to available information, following the adoption of the
2001 Doha Declaration, more than 20 LDCs have relied on Paragraph 7 of the
Doha Declaration and the 2002 pharmaceutical decision, for the importation
of generic medicines. Several LDCs such as Sierra Leone, Djibouti and
Zambia relied on the 2002 pharmaceutical decision and issued declarations
with regard to non-enforcement of patents for certain medicines to
facilitate importation, and to speed up the supply of the medicines. In
addition, inspired by the 2002 pharmaceutical decision and with the aim to
improve their health situation, several LDCs have excluded pharmaceutical
products from the scope of patenting for example Uganda, Rwanda and Burundi.

Recently the IDA Foundation, a non-profit provider of generic drugs to LDCs
sent a letter to our coordinator, the Ambassador of Bangladesh, where they
expressed their full support for the LDC Group request. It observed that
the pharmaceutical waiver “allows LDCs to authorize the importation of
generic medication regardless of patent status” and the existence of “the
pharmaceutical waiver and specifically the provisions of Paragraph 7”, gave
IDA “the necessary legal protection to be able to supply ARVs on a large
scale without fear of patent infringement suits”. It also stresses that the
use of the pharmaceutical waiver is not limited to ARVs but is “relevant
for both the production and procurement of products increasingly needed in
LDCs, such as those for the treatment of non-communicable diseases”. The
IDA Foundation letter, illustrates that in the absence of a TRIPS Council
decision continuing the pharmaceutical extension, suppliers of medicines
and procurement agencies would be very reluctant to supply medicines that
are patented or whose patent status is unknown for fear of patent
infringement suits

Further, UNITAID, which is an organisation that funds projects to improve
access to medicines for HIV, TB and malaria in 94 countries, including many
LDCs, in its statement of support for the extension acknowledged the fact
that “This exemption has facilitated access to affordable medicines in
LDCs, and UNITAID urges WTO Members to unconditionally approve the request
by the LDCs.”

To that end therefore, it serves to show that Paragraph 7 of the Doha
Declaration and the 2002 pharmaceutical decision have been effective and
successful in promoting access to medicines and saving lives in LDCs. Civil
society organizations from around the world have in their letter dated 05
June to WTO Members referred to the Paragraph 7 mechanism as “one of the
most successful provisions of the Doha Declaration on TRIPS and Public


Mr Chairman,

Exclusive Marketing Rights or EMRs in short confer patent-like rights and
is another form of monopoly. If LDCs are bound to grant EMRs, the value of
a pharmaceutical transition period would be very limited, since access to
medicines and other pharmaceutical products could be effectively blocked
for at least five years.

The transition period would be redundant if its basic objective of enabling
access to affordable generic medicines is curtailed. Therefore, following
the 2002 pharmaceutical transition period, the WTO General Council in 2002
granted a waiver from obligations to grant Exclusive Marketing Rights. If
this obligation had not been waived, LDCs would have been required to
recognize monopolies of patent applicants for pharmaceutical products for 5
years, delaying the introduction of generic medicines and thus limiting
access to affordable medicines. There is need to renew this waiver along
with the pharmaceutical transition period.


Mr. Chairman,

The mailbox obligation requires LDCs not recognizing pharmaceutical patents
at the time of entry into force of the WTO Agreement to create a system for
receiving such patent applications to be examined at the end of the
transition period. The mailbox obligation should be waived for the
following reasons:

The requirement to install patent filing systems, implies considerable
financial and administrative efforts that will place additional burdens on
vulnerable LDCs. Further, requiring LDCs to install mailbox when they don't
even have to grant any patents (under the General extension), does not make
sense. The mailbox obligation may also have a chilling effect on generic
producers, who may be deterred from investing in generic production of
pharmaceuticals, which could in future be patented. This will have an
adverse effect on the availability of affordable generic medicines for LDCs.
Mr. Chairman,


It would be remiss if we closed our presentation without tackling the issue
of duration. As we highlighted before in our opening paragraphs, the health
challenges facing LDCs are massive – with communicable and non-communicable
diseases. The state of economy remains appalling; while poverty levels
remain high.

It would be unconscionable for WTO Members to grant LDCs – the most
vulnerable segment of countries – a time limited transition period,
requiring them to repeatedly seek extensions. A time limited transition
period creates an uncertain environment for the producers of affordable
medicines, procurement agencies, donors as well as LDC governments that
rely on the specific pharmaceutical transition period to produce and import
affordable medicines. This in turn jeopardizes the health situation of the
people and communities within LDCs, with especially adverse consequences
for the scaling up of HIV/AIDS treatment. LDCs cannot deal with increasing
communicable and non-communicable disease burden without the assurance of
continuous availability of generic medicines as long as they remain LDCs.
This view has been echoed by the Communities Delegation of People living
with HIV, in their statement of support issued on 05 May 2015. In the same
vein, in 2012, the Global Commission on HIV and Law recommended that “WTO
Members must indefinitely extend the exemption for LDCs from the
application of TRIPS provisions in the case of pharmaceutical products”.

By granting a renewable transition period, Article 66.1 recognizes that for
as long as a country remains an LDC, it will face various constraints, and
will need an exemption from TRIPS obligations. Previously a time limited
duration was given, and yet during this period, the socio-economic
situation in LDCs has worsened and the health needs remain even greater.
You have heard the numbers.

In closing Chair, Considering that our health needs persist, and in many
ways are growing because of the continued threat of infectious, neglected,
and non-communicable diseases and other new emerging diseases. As evidenced
by our continuing LDC status, we still face unrelenting development and
capacity challenges. To address these pressing public health needs, to
secure the ability to progressively realize the right to health, and to
ensure our continuing right of access to more affordable medicines of
assured quality; we the Least Developed Countries call upon you and the
Council to grant the extension of the transitional period under Article
66.1 of the TRIPS Agreement for Least Developed Countries with respect to
Pharmaceutical Products, and for waivers from the obligation of Articles
70.8 and 70.9 for as long as the member is an LDC.

I thank you


Mr. Chairman, we would like to express our profound appreciation for the
extensive support that we have received from all the distinguished Members
in this Council, Members of Parliaments in various jurisdictions who have
written letters of support to there respective Governments urging them to
grant this request; and International Organizations, such as the WHO, UNDP
and UNAIDS, UNITAID, the NGO delegation to UNITAID; and Communities
Delegation on the Board of the Global Fund to Fight AIDS, Tuberculosis and
Malaria; hundreds of Civil Society Organizations and networks from around
the world as well as Suppliers of Generic Medicines in LDCs.

We also express our sincere appreciation to all the partners who have
expressed keen interest in learning more about our request. As a group, we
are committed to address your concerns with the view to ensuring a quick
conclusion of this matter with the adoption of the decision to extend the
transition period consistent with our request

I thank you

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