[Ip-health] June 2015: Holy See admonishes WTO to grant indefinite exemption for LDCs from IP rules for pharmaceutical produts

Thiru Balasubramaniam thiru at keionline.org
Thu Sep 24 09:01:19 PDT 2015

As much attention is focused on the Pope's visit to the United States, the
intervention of the Holy See at the June 2015 TRIPS Council (supporting the
LDC request for an indefinite exemption from WTO IP rules on pharmaceutical
products) may be of interest to readers of ip-health.





Wednesday, 10 June 2015

Mr. President,

I join previous speakers to congratulate you on your election. The World
Health Organization (WHO) estimates that about one-third of the population
lacks regular access to essential medicines and vaccines. It believes that
10 million lives could be saved annually if such resources were more
readily available.

The Least Developed Countries (LDCs), as the poorest and weakest segment of
the international community, are most vulnerable. The classification of
LDCs is contingent on a number of key human development indicators,
including levels of poverty, literacy and infant mortality. At the
beginning of the Millennium, the Least Developed Countries enjoyed the
strongest and longest growth rates since the 1970s, benefiting from
sustained global growth, surging commodity prices and buoyant capital
flows. Between 2000 and 2008, the average annual growth of this Group’s
real gross domestic product (GDP) exceeded 7 per cent, raising hopes that
some LDCs may be able to graduate from this category within the present
decade. However, with the global financial crisis in 2008 and the drastic
change in external conditions, LDCs have experienced a slowdown of economic
activity. As a result, their economic growth has been much weaker during
the past five years. It has been well below the target rate of 7 per cent
annual growth established in the Istanbul Programme of Action (IPoA) which
is considered necessary for attaining the Millennium Development Goals

With the recovery of the global economy remaining slow and uneven, the LDCs
faced a challenging international environment in 2013. This sluggish global
economic growth, which translated into weaker international demand for
commodities and a consequent decline in their prices, adversely affected
the economic growth and export performance of several LDCs. The outlook for
the LDCs in the short and medium term remains uncertain. While global
output is expected to strengthen moderately in the medium term, uncertainty
about the pace and the strength of the recovery persists. A fragile and
uncertain global recovery could hinder LDCs’ economic performance due to
weak international demand and lower commodity prices. Adjusting to a
changing external environment has always been a key challenge for these
economies, but this is now exacerbated by a weak world economy and
prevailing uncertainties. The less favourable external environment, coupled
with LDCs’ weaker growth performance, suggests that achieving the MDGs, or
the SDGs that are planned to succeed them, will be difficult.

As underlined in the Istanbul Program of Action, LDCs are the most
“off-track” in the achievement of the internationally agreed development
goals. Their productive capacity is limited, and they have severe
infrastructure deficits1. In 2011, of the 34 million people living with HIV
worldwide, some 9.7 million lived in LDCs. Of these, 4.6 million were in
need of antiretroviral treatment (ART); however only 2.5 million had
received it2. Up to one-half of those deprived of treatment were expected
to die within 24 months3. In the 49 countries designated as LDCs by the
United Nations, non-communicable diseases as well are rising much faster
than in higher income countries.

Mr. President,

Some LDCs have used the transition period as a major selling point for
attracting investment in their local pharmaceutical industry4. However,
some LDCs have provided patent protection for medicines despite the
availability of the transition period or have signed free trade and
investment agreements that may contain IP provisions curtailing any
benefits arising from the transition period. In this context, the report
observed that the transition period in itself, though important, will not
be sufficient to attract generic companies to invest in local
pharmaceutical production5. However, the transition period is intended to
provide LDCs with the necessary policy space to take measures that would
facilitate the growth of industrial capacity in desired sectors without
being impeded by the existence of patents, which could hinder the
development of the local industry.

Since 2000, there has been a noticeable decline in the number of new HIV
infections in LDCs since 2000, as in the developing world as a whole,
reflecting improvements in early diagnosis, access to treatment, nutrition,
and responsible behaviour change. However, despite such improvements, the
goal of universal access to anti-retroviral treatment is far from achieved
and requires continuing investment and both health and community system
strengthening. Moreover, the deficiencies of health systems in LDCs have
been sharply highlighted during 2014 and 2015, in conjunction with the
significant outbreak of the Ebola Virus Disease in Coastal West Africa.
Such health emergencies could jeopardize, or even reverse, the achievements
of several LDCs in terms of human and economic development.

We have before us a critical opportunity to help LDCs to reach health and
sustainable development goals and the failure to do so could put millions
of lives at risk. Access to adequate healthcare, including affordable
medicines, remains a key challenge in most LDCs. The current flexible
intellectual property arrangements for LDCs are a crucial tool for
improving health. In fact, the flexibility agreed in TRIPS Article 66.1 has
been accepted in recognition of the economic, financial, and administrative
constraints preventing LDCs from immediate observance of all the
obligations set out in the TRIPS Agreement. The general transition period
may be useful in supporting the development of a strong chemical industry
that could gradually move toward to production of API (Active
Pharmaceutical Ingredient). Long-term sustainability of the local
pharmaceutical industry would require the development of the internal
capacity to manufacture generic formulations thus reducing dependency and
the high import costs for obtaining APIs. In particular, there is a need to
develop a second line HIV treatment which, a present, is more than double
the price of the first line regime. Moreover, the costs for a third line
HIV treatment could be as much as 15 times the price of first line
treatment. Clearly, in this context, the establishment of a pharmaceutical
industry is particularly important.

Mr. President,

As clearly stated by the TRIPs Agreement, a well-designed intellectual
property system “should contribute to the promotion of technological
innovation and to the transfer and dissemination of technology, to the
mutual advantage of producers and users of technological knowledge, in a
manner conducive to social and economic welfare, and to a balance of rights
and obligations”6.

In conclusion, Mr. President, the Holy See Delegation hopes that a sense of
common responsibility, as shown in the decision adopted, will bring us all
to recommend to the General Council a waiver for LDCs from obligations
under Articles 70.8 and 70.9 of TRIPS for as long as they remain LDCs.

Thank you, Mr. President.


1) Istanbul Plan of Action (par.4) doc. A/CONF.219/3.

2) TRIPS transition period extensions for least-developed countries, UNDP
and UNAIDS Issues Brief,/13, February 2013.

3) Mr. Michel Sidibé, UNAIDS Executive Director, Report to 31st UNAIDS
Programme Coordinating Board, December 2012,

4) UNCTAD (2011), Investment in Pharmaceutical Production in the Least
Developed Countries: A Guide for Policymakers and Investment Promotion
Agencies (UNCTAD Secretariat, Geneva, New York), pp. 40-42, available at
http://unctad.org/en/Docs/diaepcb2011d5_en.pdf (last visited 3 June 2015)

5) Ibid.

6) Article 7 TRIPs Agreement.

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