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<DIV><STRONG>TWN Info Service on Health Issues No.13<BR>31 October
2005<BR>Third World Network<BR><A
href="http://www.twnside.org.sg">www.twnside.org.sg</A></STRONG></DIV></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><STRONG>In view of a possible avian flu pandemic, Consumers International
(CI) has called on the WTO's TRIPS Council to clarify the 30 August 2003
decision regarding the implementation of paragraph 6 of the Doha Declaration on
TRIPS and Public Health.</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>The 30 August 2003 decision by the WTO General Council allows
generic copies of medicines made under compulsory licences to be exported to
countries that cannot produce, under certain conditions.</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>All WTO member countries are eligible to import under this decision
but 23 developed countries have said they will not use the system for
imports. These 23 countries which have opted out as importers, plus
another ten who had to opt out as a condition of joining the EU, will result in
hundreds of millions of people who will not be able to obtain generic medicines
for stockpiles, as countries will not have the capacity to produce the
medicines.</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>The opt-out provision creates the likelihood that the costs of
producing stockpiled medicines will be high and this will reduce the capacity to
produce and result in lower levels of stockpiles everywhere.</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>So far no country has notified the WTO that they intend to use the
30 August 2003 decision as either an importer or an exporter. With
countries both in the North and South at risk of a public health emergency
should an avian flu pandemic occur, and the fact that stockpiles of medicine are
far under-sourced, 'the lack of WTO notifications is damning evidence that the
current system is not working', says CI.</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>The article below outlines these concerns. It
is reproduced with permission from the South-North Development Monitor
(SUNS) of Wednesday 26 October 2005.</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>With best wishes</STRONG></DIV>
<DIV><STRONG>Evelyne Hong</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV><STRONG>---------------------------------</STRONG></DIV>
<DIV><STRONG></STRONG> </DIV>
<DIV>Geneva, 25 Oct (Kanaga Raja) -- In light of the current situation of a
possible avian flu pandemic and other emergencies, Consumers International (CI)
has called on members of the WTO TRIPS Council to immediately begin a review of
the intellectual property rules and practices that are currently in place to
address public health problems.<BR><BR>The international non-profit organization
issued this call Tuesday in a statement addressed to the TRIPS Council, which is
meeting this week to take up amongst other issues the 30 August 2003 decision
regarding the implementation of Paragraph 6 of the Doha Declaration on TRIPS and
Public Health.<BR><BR>Consumers International, which represents the rights of
consumers globally, also requested the TRIPS Council to immediately issue a
clarification on how members who have opted out of the 30 August 2003 decision
may opt back in.<BR><BR>The 30 August 2003 decision by the WTO General Council
relates to ensuring access to medicines to countries with no or inadequate drug
manufacturing capacity.<BR><BR>Paragraph (f) of Article 31 of the TRIPS
Agreement provided that compulsory licenses must be granted mainly to supply the
domestic market, but the Doha Ministerial Conference in 2001 decided that this
should be changed so that countries unable to manufacture the pharmaceuticals
could obtain cheaper copies elsewhere if necessary.<BR><BR>The WTO General
Council on 30 August 2003 decided to allow generic copies made under compulsory
licenses to be exported to countries that lack production capacity, under
certain conditions and procedures.<BR><BR>All WTO member countries are eligible
to import under this decision, but 23 developed countries are listed as
announcing that they will not use the system for imports.<BR><BR>In a separate
statement that is not part of the waiver, 11 other members
announced<BR>voluntarily that they would only use the system as importers in
situations of national emergency or other circumstances of extreme
urgency.<BR><BR>According to the CI statement, the provision for countries to
opt out of importing generic drugs to address public health crises does not
serve the interests of consumers anywhere. It creates a strong likelihood that
the costs of producing stockpiled medicines will be high, particularly for
active pharmaceutical ingredients, which are very sensitive to economies of
scale and <BR>competition.<BR><BR>It will also reduce the capacity to produce,
and will result in lower levels of stockpiles everywhere. This, CI said, puts
everyone North and South at risk of potentially preventable death and suffering
should an avian flu pandemic occur.<BR><BR>As this week's TRIPS Council meets to
review the effectiveness of the implementation of the 30 August 2003 decision,
CI urged WTO members to consider the simple question: 'Is the current system
working?'<BR><BR>In light of the current situation with respect to avian flu, CI
called on the TRIPS Council to immediately issue a clarification on how members
who have opted out of the 30 August 2003 decision may opt back
in.<BR><BR>Furthermore, the CI statement asked the TRIPS Council to immediately
begin a review of the intellectual property rules and practices that are in
place to address public health problems, including but not limited to the case
of a possible avian flu pandemic.<BR><BR>This review should include:<BR><BR>( a)
an assessment of the medical threats to the public health that an avian flu
pandemic, SARS (severe acute respiratory syndrome) or other emerging health
threats present;<BR><BR>( b) an assessment of the degree to which WTO members
have prepared for such cases, including the stockpiling of medicines for an
avian flu pandemic or other important threats;<BR><BR>( c) the degree to which
the actual management of intellectual property policies and practices are
consistent with the 2001 Doha mandate, that WTO members implement laws in a
manner that is consistent with the protection of public health and access to
medicine for all; and<BR><BR>( d) the degree to which the TRIPS Agreement and
its implementation by WTO members should be modified in order to ensure that
effective measures are taken to protect the public from such
emergencies.<BR><BR>The CI statement also came with an explanatory note
providing details on the issue. According to the note, compulsory licensing of
patents is consistent with the TRIPS agreement, and WTO members are free to
choose the grounds for doing so.<BR><BR>Despite countless news reports to the
contrary, compulsory licensing is not limited to cases of emergencies or even to
public health.<BR><BR>That said, it is timely and important to highlight public
health emergencies as an important special case, and one that illustrates:( 1)
the vast gap between official rhetoric and performance in terms of essential
protections for public health; and (2) flaws in the 'solution' to the problem of
exporting medicines manufactured under a compulsory license.<BR><BR>On the fears
of an avian flu pandemic, under the best circumstances, assuming that the new
virus causes mild disease, the world could still experience an estimated 2
million to 7.4 million deaths.<BR><BR>Despite an advance warning that has lasted
almost two years, the world is ill prepared to defend itself during a pandemic.
The WHO has urged countries to stockpile anti-viral drugs for use at the start
of a pandemic. Around 30 countries are purchasing large quantities of these
drugs, but the manufacturer has no capacity to fill these orders
immediately.<BR><BR>On present trends, the CI note said, most developing
countries will have no access to vaccines and anti-viral drugs throughout the
duration of a pandemic.<BR><BR>The WHO has received a promise for a donation of
some 3 million doses of oseltamivir (Tamiflu) from Roche. The US has a target of
providing vaccines for 20 million persons and anti-virals for another 20
million, but only a fraction of this is actually available today.<BR><BR>The CI
note cited the WHO as saying: "On present trends, most developing countries will
have no access to vaccines and anti-viral drugs throughout the duration of a
pandemic."<BR><BR>There are two causes for the small stockpiles - capacity and
price. Roche and Gilead, the two firms that control the relevant patents on
oseltamivir, have been unwilling or unable to expand production of the medicine,
and have yet to freely license their patents to generic
suppliers.<BR><BR>According to the CI note, the WHO estimates that it would take
a decade for Roche to manufacture the desired oseltamivir stockpiles. There has
also been very little demand from governments for stockpiles of oseltamivir,
because of the high prices that Roche has charged - $6 per dose in some press
reports.<BR><BR>Governments all over the world are now making announcements that
they will consider compulsory licenses for the oseltamivir patents. These
include members of the US Congress, as well as governments in Argentina, Korea,
the Philippines and Thailand.<BR><BR>The CI note said that Roche is now carrying
out a public relations and damage control effort to salvage as much control over
the patents as possible. There is also need for addressing increased
generic supplies of zanamivir and other medicines, for
example.<BR><BR>[According to recent media reports, Roche, under pressure from
the US, has agreed to give the license to manufacture Tamiflu to four US generic
drug manufacturers.]<BR><BR>The CI note also highlighted a particular problem
(about issuing compulsory licenses) concerning the nature of the 30 August 2003
decision regarding the implementation of Paragraph 6 of the Doha Declaration on
TRIPS and Public Health.<BR><BR>CI highlighted one of the problems, i.e. the
'opt-out' provision that countries may elect as importers, and the mandatory
'opt-in' provisions for both importers and exporters.<BR><BR>First, the WTO
TRIPS Council should reflect that no countries have notified the WTO that they
intend to use the 30 August 2003 decision as either an importer or an exporter.
Given the current situation, this raises profound questions about the way the
global community perceives the 30 August 2003 decision.<BR><BR>With populations
at a growing risk of a public health emergency, and the clear evidence that
stockpiles of medicine are far under-sourced, "the lack of WTO notifications is
damning evidence that the current system is not working."<BR><BR>Second, CI
said, is the fact that 23 countries opted out as importers, and another ten were
required to opt-out by the EC as a condition of joining the EU. As a
consequence, hundreds of millions of people will likely be unable to obtain
generic medicines for stockpiles, as they will not have the domestic capacity to
manufacture the medicines. These include virtually everyone from the United
States to Latvia.<BR><BR>The decision to opt-out of the 30 August 2003 decision,
even for a national emergency, is either evidence that the decision is highly
unworkable and irrelevant for these countries, or that trade officials want to
allow their own populations to go without life-saving medicines in a time of
emergency, the CI note said.<BR><BR>The fact that 33 countries are opting out
has undermined the legitimacy of the 30 August 2003 decision, and is partly
responsible for the reticence of developing countries to openly use this
decision, said CI.<BR><BR>In a scenario of an avian flu pandemic, CI said that
even if some countries have sufficient or excessive stockpiles of generic
medicines, they would not be able to share medicines across borders. Estonia,
Poland, UK, Greece, Latvia, France, the Netherlands, New Zealand, Australia, the
US and other members of the group of opt-out countries will each be in a state
of autarky, an ironic obligation to be imposed on them by an organisation
officially devoted to liberalised trade.<BR><BR>The opt-out provision does not
serve the interests of consumers anywhere, added CI. It creates
likelihood that the costs of producing stockpiled medicines will be high,
particularly for active pharmaceutical ingredients, which are very sensitive to
economies of scale and competition. It will also reduce the capacity to produce
and will result in lower levels of stockpiles everywhere.<BR><BR>CI also urged
the TRIPS Council members to consider the implications of the terms of
exclusivity for the protection of pharmaceutical test data on access to
medicines. Under Article 39.3 of the TRIPS Agreement, members are required to
protect pharmaceutical test data used for marketing approval by regulatory
authorities against unfair commercial use.<BR><BR>However, in the implementation
of Art 39.3, certain WTO members have chosen to grant exclusive rights to rely
upon pharmaceutical test data which is used for the registration of medicines.
This practice erects barriers to generic competition because it is expensive,
time consuming and sometimes unethical to replicate the tests.<BR><BR>The term
of such protection generally ranges between five and ten years in countries that
have adopted this system. In the event of a public health crisis, such type of
legislation would mean that countries would have to wait five to ten years
depending on the period of exclusive rights before there could be generic
competition.<BR><BR>CI believed that any country that creates exclusive rights
in health registration data undermines the mandate of paragraph 4 of the Doha
Declaration, which asserts that the TRIPS Agreement "can and should be
interpreted and implemented in a manner supportive of WTO members' right to
protect public health and, in particular, to promote access to medicines for
all."<BR><BR>The CI note also said that the 30 August 2003 decision by the WTO
General Council was widely criticized by public health groups on the grounds
that it was restrictive, complex and protectionist.<BR><BR>It allows wealthy
countries to export to poor countries, while restricting imports from poor
countries to rich countries. It does not explicitly recognise insufficient
economies of scale or comparative advantage as a basis for determining
eligibility for importing countries, even though the realisation of efficient
scale economies and favourable comparative advantage is one of the main putative
advantages of liberalised trade.<BR><BR>Decisions regarding remuneration are
made in exporting rather than importing countries, while the procedures for
compulsory licensing for export for public health reasons are far more complex
and burdensome than are required for compulsory licensing for domestic use, or
when compulsory licenses are issued as a remedy to anti-competitive practices
under Article 31.k and Article 40 of the TRIPS Agreement.<BR><BR>The African
Group proposal seeks to solve some of the problems with the 30 August 2003
decision by the WTO General Council, and should be supported, the CI
recommended.</DIV></BODY></HTML>