[Ip-health] TWN Info: US stands in the way of LDCs' pharmaceutical transition period

Sangeeta Shashikant sangeeta at twnetwork.org
Fri Oct 16 07:02:57 PDT 2015

Title : TWN Info Service (IP/Health): US stands in the way of LDCs’
pharmaceutical transition period
 Date : 15 October 2015


TWN Info Service on Intellectual Property Issues (Oct15/04), Health
15 October 2015
Third World Network

US stands in the way of LDCs’ pharmaceutical transition period

Geneva, 15 Oct (Sangeeta Shashikant) – As the World Trade Organization’s
intellectual property body begins its session today, there is emerging
consensus among the organization’s members that the poorest nations in the
world, the least developed countries (LDCs), should not have to apply or
enforce pharmaceutical product patents or to implement ‘mailbox’ or
exclusive marketing rights for as long as they remain LDCs.

The WTO Trade-Related Aspects of Intellectual Property Rights Agreement
(TRIPS) Council is meeting in Geneva on 15-16 October.

However, whether or not these vulnerable nations will clinch their desired
demands very much depends on the United States, which remains opposed to
LDCs’ requests.

A trade diplomat told Third World Network (TWN) that, “we have given the US
concrete arguments, facts and figures supporting the LDCs’ requests, what
else do they need” adding that its now a “political decision”.

Trade diplomats also informed TWN that the matter is now to be discussed at
the Ambassadorial level between the US and the LDC Group.

Earlier this year, the WTO LDC Group submitted as required by Article 66.1
of the TRIPS Agreement, a “duly motivated request” (IP/C/W/605) seeking an
extension of the pharmaceutical transition period for as long as a country
remains a LDC, as well as waivers from the mailbox and exclusive marketing
rights obligation. The LDC Group’s request is aimed at extending the
pharmaceutical transition period granted by paragraph 7 of the 2001 WTO
ministerial Doha Declaration on TRIPS and Public Health. The transition
period comes to an end this year.

[Article 66.1 of the TRIPS Agreement states: “The Council for TRIPS shall,
upon duly motivated request by a least-developed country Member, accord
extensions of this period”.   Paragraph 7 of the Doha Declaration on the
TRIPS and Public Health states: “We also agree that the least-developed
country Members will not be obliged, with respect to pharmaceutical
products, to implement or apply Sections 5 and 7 of Part II of the TRIPS
Agreement or to enforce rights provided for under these Sections until 1
January 2016, without prejudice to the right of least-developed country
Members to seek other extensions of the transition periods as provided for
in Article 66.1 of the TRIPS Agreement”.

The TRIPS Council in its decision IP/C/25 formally adopted Paragraph 7 of
the Doha Declaration.]

At the June 2015 TRIPS Council session the LDC Group defended their requests
arguing that the classification of LDCs is contingent on a number of key
human development indicators including levels of poverty, literacy, infant
mortality and economic vulnerability determined by the United Nations. They
also presented statistics showing the poor economic performance of LDCs,
their widespread poverty and the massive public health challenges that
prevail in LDCs.

The LDC Group further presented evidence of the successful use of paragraph
7 of the Doha Declaration by LDCs such as Sierra Leone, Djibouti and Zambia
to facilitate importation of affordable medicines, and to speed up the
supply of such medicines, stressing also that the Paragraph 7 mechanism is
known as “one of the most successful provisions of the Doha Declaration on
TRIPS and Public Health”.

They argued for waiver from exclusive marketing rights (EMRs) which confer
patent-like rights, stating that “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”.

On mailbox, the LDC Group argued that “The requirement to install patent
filing systems, implies considerable financial and administrative efforts
that will place additional burdens on vulnerable LDCs” and that “requiring
LDCs to install mailbox when they don't even have to grant any patents
(under the General Extension of the transition period to implement the TRIPS
Agreement), does not make sense” adding that it may have a chilling effect
on generic producers, who may be deterred from investing in generic
production of pharmaceuticals, which could in future be patented, thus
adversely affecting the availability of affordable generic medicines for

In the run-up to the June TRIPS Council session and since then, the LDC
Group’s motivated requests to the Council have received widespread
unconditional support from developing countries, the European Union members,
various UN and international agencies (WHO, UNITAID, UNAIDS and UNDP),
suppliers of generic medicines to LDCs, and civil society organizations from
across the world. 

Even members of the US Congress, Senators including Senator Bernie Sanders,
a contender for the US presidential campaign, have in various letters to
Michael Froman the US Trade Representative (USTR) urged the US to support
LDCs’ request for a pharmaceutical transition period for the duration that a
country remains a LDC.

In unequivocally supporting the LDCs’ requests, European Commissioner
Cecilia Malmstr๖m said: “The poorest countries of the world need effective
access to medicines. Although patents stimulate innovation in developed and
emerging economies, intellectual property rules should be a non-issue when
the world's poorest are in need of treatment. This exemption will give the
least developed countries the necessary legal certainty to procure or to
produce generic medicines.”

On the duration, the European Commission’s press release of 10 September
2015 adds: “The WTO granted a time-limited exemption before to these
countries, but the Commission believes that extending it indefinitely would
give legal certainty for long-term supply as well as enhance local
production of much-needed medicines”.

In a recent letter to the USTR dated 14October 2015, US Senator Sherrod
Brown calls for the US to support the LDCs’ requests and “to reject any
effort to require these severely impoverished nations to implement the TRIPS
intellectual property requirements for pharmaceutical products by a certain
date”, arguing that “Rejecting a permanent extension of the LDC waiver and
setting a compliance date is impractical. Until a country has graduated from
the LDC designation, meeting the TRIPS pharmaceutical requirements will
limit its ability to address basic medical needs for its citizens and hinder
efforts to lift them out of poverty. Tying the requirements to the LDC
classification is in and of itself establishing a timeline by which a
country must meet the pharmaceutical intellectual standards”

In an earlier letter to the USTR dated 2October 2015, seven US Members of
Congress announced their support for the LDCs requests, stressing that “we
believe that indefinite waiver of the WTO obligations to grant and enforce
pharmaceutical patents is necessary and should be US policy. Waivers should
not end based on arbitrary date but should end only when a country no longer
classifies as an LDC under United Nations established criteria”.

In yet another letter to the USTR, presidential candidate Senator Bernie
Sanders, states: “All over the world, people are finding that the prices of
prescription drugs they need are rising and for many people, simply
unaffordable. As a result, sick people get sicker. Some die. This situation
is especially dire in the poorest countries in the world, countries
classified by the United Nations (UN) as Least-Developed Countries (LDCs).
The inability of people in these countries to afford the medicine they need
is made worse because of a lack of a stable economy or public health
infrastructure”, adding also his request that the US Administration “endorse
an indefinite waiver of the World Trade Organization's (WTO) obligation to
grant and enforce pharmaceutical patents for countries classified by the UN
as LDCs.”

Despite this widespread support in particular from US legislators, in the
numerous bilateral discussions with LDC representatives and informal
consultations held by the Chair of the TRIPS Council, the US negotiators
have remained steadfast their opposition to a transition period linked to
the LDC status and the LDCs’ request for a mailbox waiver.

Trade diplomats speaking to TWN also indicated that the US have in some
consultations suggested that they may require LDCs to agree to certain
“principles” as part of the pharmaceutical transition period package, and
that this demand is of concern as these “principles” could create barriers
to access to affordable medicines in LDCs.

Trade diplomats also said that Canada, Switzerland, Australia and Japan have
in several consultations called for a time-bound transition period and
questioned the need for a mailbox waiver; however these delegations would
privately acknowledge that they would be willing to go along with consensus.
Thus the US remains the barrier.+

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