The Doha Declaration on Public Health - Term Paper Example

The Doha Declaration on Public Health and the Generic Drug Waiver Accord of the WTO TRIPS Agreement Name: Unit: Course: Supervisor: Date of submission: Introduction In January, 1995, the World Trade Organisation (WTO) came into force. In the same year, there was an agreement by the member nations on intellectual property rights.1 This was an agreement on Trade Related Aspects of Intellectual Property (TRIPS) Agreement. Implication of TRIPS was based on main provisions that sought to enhance flexibility in compulsory licensing of pharmaceutical products. Article 31 (f) of TRIPS mandated that exports of products that have been manufactured under auspices of compulsory licence should account for less than 50% of domestic production2. This provision under article 31 (f) was supposed to ensure that there was a global standard pertaining protection of intellectual rights and patents. This paper discusses TRIPS agreement and Doha declaration and its implications. History of Doha Declaration One key characteristic of international trade is that there exist differences in economic size and development levels of trading nations. These differences affect the negotiations that are conducted at international level. The nature of the international trade is that developing countries are placed at a disadvantage because they have less bargaining power and thus decisions are influenced by the developed nations3. The coming to force of TRIPS Agreement in 1995 had many legal and socio-economic implications to many countries especially on matters that related to public health. It brought a lot of limitations to developing countries endeavour to deal will epidemics such as malaria, tuberculosis and HIV/AIDS; as access to affordable drugs were limited due to restrictions surrounding compulsory licensing.4 It has been argued that developing countries acceded to TRIPS Agreement without prior analysis of its implications; it was a package that was signed in anticipation for access to international markets.5 After TRIPS Agreement came to force, there were many happenings that endeavoured to ensure that the provisions in article 31 subparagraph (f) were interpreted to allow for flexible compulsory licensing that led Doha Declaration 2001.6 In efforts to ensure flexibility of in relation to compulsory licensing, there were contentions between developed countries and developing countries. The developing countries argued that compulsory licensing that is aimed at addressing epidemics was not a violation TRIPS Agreement. On the other hand developed countries such as USA and Switzerland were of view that that flexibility that could be realised under TRIPS Agreement was through staggered implementation process that favoured the developing countries by allowing a time frame for full implementation.7 The WTO dispute resolution body which is mandated in solving issues relating to WTO members did not address these divergent interpretations. This was greatly informed by fact that legal effect of interpretation of treaty based unilateral decision made by a member state is not binding upon other members.8 Therefore, there was a legal dreadlock in solving the contradicting views of member states. This dreadlock was aggravated by further enshrinement provisions in customary law that recognises that treaty interpretation is supposed to be based on purpose, object, text and good faith. However, if these applications do not result to an interpretation that contracting member states consider conclusive, a supplementary basis of interpretation can be applied9. This view of supplementary basis; points to the Doha Declaration of 2001 that was made by member state ministers. This legal principle has been used to propagate argument that Doha Declaration 2001 served as an interpretive element that was aimed at solving the contentions surrounding TRIPS agreement based international law. Events preceding Doha declaration included series of meeting by NGOs, developing countries and legal happenings in WTO. For instance, in 1996, NGO convened by Health Inaction International in Bielefeld Germany. A similar meeting was held in New Delhi and included developing countries government officials. The two meeting were deliberating on the impacts of TRIPS Agreements on access to medicine.10 In 1997 saw the World Health Organisation (WHO) led African member states to push for a “Revised Drug Strategy” that was supposed to ensure that public health needs are fundamental in health and pharmaceutical polices and safeguard access to drugs.11 Increasing impacts HIV/AIDS epidemics and the September 11th 2001 terrorist attacks that were followed with anthrax scare necessitated the need to review TRIPS Agreement to ensure public health issues were addressed especially those affecting developing countries.12 The happening changed the stance of USA on flexibility argument that it had held before. Therefore, in WTO ministers’ meeting in Doha held on 14th November,. 2001, a declaration on TRIPS Agreement was made and that has come to be referred as the 2001 Doha Declaration. The agreement upheld most of provisions in TRIPS Agreement. However, the ministers agreed that the TRIPS Agreement was not and should not protect members from protecting public health.13 This declaration though does not have legal clouts as TRIPS Agreement it changed landscape on interpretation of TRIPS and has played a major role in ensuring that both the developing and developed countries can have access to essential medicines through compulsory licensing that is flexible and provided for parallel imports which added flexibility to TRIPS. Generic Drug Waiver Accord Compulsory licensing is a common application in many domestic intellectual property laws, however, its application under TRIPS necessitated provisions to compulsory licensing that could allow the member states have a right to increased access to pharmaceutical products.14 This was enshrined in article 31 of TRIPS Agreement that gave the member states a right of invoking compulsory licensing15. However, this right was not absolute; there were provisions that legally limited the member states to easy access of compulsory licensing. For instance, a member requesting for the licence had to negotiate with the patent holder. This was only avoidable in case of national emergency. Based on the nature of international integrations, negotiations take relatively long time and which may negate the time factor in wake of an emergency such as Ebola. In addition, the exemptions that were based on emergency did not define comprehensively what constituted an emergency. In a realistic perspective, a public health crisis in on country may not be considered as a public health crisis in another. Therefore, the sovereignty to determine national emergency, did not guarantee outright access to compulsory licensing.16 In addition to access to the compulsory licensing, there was the issue of pricing that also acted a barrier to access to drugs in advent of an emergency. The provisions relating to compulsory licensing as outlined in subparagraph (b) of article 31 of TRIPS were further curtailed in section subparagraph (f) which provided for supply of products to be limited to domestic supply.17 This meant that over half of the WTO members were being limited as they were categorised as developing nations hence limited capacity and human resource capability to produce for domestic use. These restrictions were bone of contention between developed and developing countries. Doha declaration and subsequent reviews were aimed at addressing the emerging concerns. Key implication of Doha Declaration 2001 was flexibility of compulsory licensing. Compulsory licensing has been defined as when a government allows another person to manufacture goods that are patented or copy a process without necessary the consent of the patent owner.18 In an attempt to ensure there is equality in access to drugs, compulsory licensing was an integral component that was enshrined in TRIPS Agreement in 1995. However, there were provisions that made implementation of the compulsory licensing next to impossibility. Despite of the compulsory licensing being enshrined, TRIPS agreements did not provide reasons that could justify its application. Article 31, just mentioned national emergencies and circumstances that could be considered as extreme urgencies, these provisions were not defined in context.19 Governments from developing countries were unsure how the flexibilities as laid in article 31 could be applied and the extent of the right to them. The Doha Declaration 2001 stressed the importance of interpreting TRIPS Agreement in manner that promoted public health interests by ensuring that member states enjoyed access to existing medicines and processes for recreation of medicines.20 After Doha Declaration, there was also the challenge of developing countries ability to access drugs, Article 31(f) provided that pharmaceutical produced under compulsory licensing should be only be produced for domestic use21. This provision made that only countries with capacity to manufacture drugs were to benefit. The countries without capacities to manufacture which included the least developed and developing countries were at disadvantage. Unfortunately, these were the countries that had pushed for the Doha Declaration. Malaria, HIV/AIDS and tuberculosis were and are more prevalent in developing countries in sub-Sahara Africa and most of them had no capacity to manufacture their drugs. Hence they could not access generic drugs produced under terms of compulsory licensing. This challenge of importing and exporting generic drugs was solved on August 30th 2003, when contracting WTO concurred on legal changes that were to make it easier for countries to import cheaper drugs under compulsory licensing. This decision had three waivers that had legal impacts on article 31 (f) of TRIPS Agreement.22 1. The first waiver was doing away with obligation that was placed on exporting countries under article 31 (f). The waiver granted any contracting country to WTO the right to export generic pharmaceuticals manufactured under compulsory licences to importing countries. Key strength of this waiver was its legal implication and public health significance. The legal implication is that it no longer acted as interpretive element of article 31 (f) of TRIPS Agreement but changed the landscape of application of the article under the Doha Declaration 2001. The waiver served as a means of clearing the controversial interpretation that existed and defined the extent of compulsory licensing right contracting countries could enjoy.23 Before, the waiver, countries manufacturing generics under compulsory licensing were obligated to ensure that the pharmaceuticals were for home market only and hence could not export surplus to countries in demand. This limited manufacturing countries from enjoying economies of scale. However, the waiver removed this obligation. A key provision of the waiver was that the exporting countries could export to meet the needs of countries importing.24 This ensured that those countries could have access to cheap pharmaceuticals to help in fight of epidemics. Despite of these implications, this waiver of the obligation for the exporting countries is a threat to patent holder as there is a possibility of the generics being diverted to wrong markets. This means that contracting governments are implored with mandate that is not bound by WTO to ensure that system of compulsory licensing and export is not abused. This waiver also gave right for countries applying to use compulsory licence to make use of processes, this has been argued to be an infringement on the patentability of products and there is tendency to apply on other non pharmaceutical products. Adherence to the compulsory licensing and exporting thus remains to be based on carefully negotiated conditions. There is no legal clout that binds exporting and contracting members on issue of diverting generic pharmaceutical products25. To avoid this, there is need for provision that underscores how the system of compulsory licensing should be applied to bind exporting countries from issues of misusing waiver. An obligation should be placed under article 31 (f) to define terms of export and extent to which to ensure integrity of the patent goods. 2. The second waiver addressed issues that pertained remuneration to the patent holder. It removed the obligation of importing countries to pay the patent owner26. In a perfect world, economists would concur that a patent should holder take price actions to avoid the risk that comes with compulsory licensing. This could be achieved by pricing pharmaceutical products to an amount that poor countries can afford. This would ensure that the originator of the pharmaceutical products prices the product close to marginal price and sells a lot of that product to the poor countries hence making them to enjoy volume of sales at low profits. This could be a measure to avoid the re-export by other countries27. However, this thought aligns to realist perspective that is hard to be realised and hence the flexibility of TRIPS Agreement was needed for compulsory licensing that was to effect price changes as implied by this waiver. The implication of this waiver was that countries importing were cushioned from double payment, i.e. to the patent owner and to the exporter. This waiver served to promote the welfare of developing countries and ensured that the burden of double payment was solved. However, it can be implied that this measure sidelines the patent holder as the benefit to a patent is transferred to the exporter thus exhausting intellectual property rights. This waiver can thus be said to contradict TRIPS Agreement provision that were upheld during Doha Declaration of 2001. It challenges the right to give each member a right to establish a regime subject to application of most favoured nation (MFN) provision28. One great weakness of this waiver is that the developing countries have developed reliance on compulsory licensing which has led to effect of lowering prices with a great margin that patent owners could not price. Essentially this has improved public health for many people in developing countries. However, the waiver raises issue of social cost in which could see reduction in research driven pharmaceuticals29. In order to uphold the patentability of the holder, the exporter and the owner should negotiate to ensure that a balance is struck. 3. The third waiver removed constraints that could affect the developing and least developed countries in exporting pharmaceutical products manufactured under compulsory licence. This provision main implication was to allow the countries to engage in export based on regional trade agreements. It is worth to not that more than half of the members to WTO were categorised as least developed countries during the time of drawing these waiver. Even though this waiver has been argued by some policy analysts as vague, it had great economic implications for developing countries. It created room for the developing and least developed countries to enjoy economies of scale. Essentially, this waiver was supposed to contain scope of diseases that were to be covered. Due to differences, there was no list of diseases that were included as to qualify or be disqualified. United States of America advocated for the waiver to be limited to major epidemics that included HIV/AIDS, malaria and tuberculosis and other potential of ‘small infectious diseases’. Countries from Europe were not specific and instead proposed that the issue be confined to public health problem that could be considered as “grave”. 30 Legally, it implies this was an open waiver. This posed a challenge of misuse of the waiver as developing countries and exporting countries could misuse the waiver for financial gain. However, it is worth noting leaving the waiver open was aligned to Doha Declaration of 2001 that gave the contacting members the right to determine a public health emergency and other happening that could be considered as urgent and qualified to be a crisis.31 The outbreak of Ebola in West Africa is a good example. This can be defined as an urgent public health crisis that guarantees the affected countries right to import pharmaceutical products that are needed to curb the crisis. This means that the countries qualify to compulsory licence under what European termed as “grave” public health issue. These waivers are argued to have amounted to outright revolution in international intellectual property. Combination of the three waivers as envisioned allowed “back-to back compulsory licences”.32 This meant that a country that required pharmaceutical products could apply to import products for a cheaper price than that charged by patent holder as they can seek help from countries that are able to produce the drugs. In addition, developing countries can access generic pharmaceuticals from regional trade agreements. Due to the waivers, between 2003 and 2006, there was recorded high volume of compulsory licensing activities especially for ARVs33. Even though the second waiver opened space for differential pricing that is based on the consumer purchasing power and factors relating to socioeconomic segments, differential pricing mechanism have not provided the free access as they show substantial differences across the pharmaceutical products.34 Exporting countries have been very cautious in matters relating to profits because of fear of eroding their profit margins. This implies despite of the waivers that relate to compulsory licensing, there still exist barriers that need to addressed to increase applicability of WTO generic drug waiver accord.35 WTO waivers resulted in many countries with potential to export changing domestic laws that touched on compulsory licensing in order to implement waivers and produce the generics for export. For instance, Canada changed its laws and produced a lot of HIV/AIDS drugs for Rwanda under the auspice of compulsory license.36 Conclusion The Doha Declaration 2001 has had a great positive effect on public health. It has ensured that both developed and developing nations have access to pharmaceutical products in times of emergency. Flexibility that was brought about by 2003 waivers has led to increased activity of compulsory licensing pertaining HIV/AIDS drugs (ARVs). This has played a crucial role in curbing the spread of the epidemic and giving the people infected hope of living as the drugs can be accessed. Today, the world attention has shifted to Ebola outbreak; WTO waivers come to play as affected countries can order for Ebola management medicines at a cheaper price. The need to reduce inequality and ensure that both the developing and developing nations had access to drugs required a flexible compulsory licensing. This definitely was to change the interpretation of TRIPS agreement section 31 (f). Doha declaration of 2001 brought new interpretation and it is accredited for increasing TRIPS flexibility. Doha declaration led to 2003 changes and waivers that have been core to improving the accessibility of pharmaceutical products by the developing and least developing countries. It is a matter of fact that the post-Doha TRIPS did open opportunities on developing countries. However, it is worth to note that the Doha declaration of 2001 and the 2003 waivers relate to pharmaceutical products patents and does not apply to other products. References Cohen, J. 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Intellectual Property Rights in the WTO and Developing Countries Boston: Kluwer Law International. WHO. (2008). Access to medicines: Country experiences in using TRIPS safeguards Available at http://www.searo.who.int/LinkFiles/IPT_B​riefing_note_4_country_experiences.pdf World Trade Organization (WTO). (2001). Declaration on the TRIPS Agreement and Public Health. WTO. Available at, http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm (Accessed on 30th October, 2014) Read More