‘The final piece of the jigsaw has fallen into place,” opines Supachai Panitchpakdi, director general of the World Trade Organisation (WTO). “This is a historic agreement,” he states, “allowing poorer countries to … deal with the diseases that ravage their people.” Interesting, but untrue.
At its last ministerial meeting in November 2001 in Doha, the WTO agreed that the international agreement on intellectual property, more commonly known as Trips (trade related aspects of intellectual property rights), “can and should be interpreted and implemented in a manner … to promote access to medicines for all”.Â
Until that point, the industrialised world had sought to use Trips to force developing countries to offer strong patent protection for all inventions, with full knowledge that high levels of patent protection for essential products invariably led to excessive pricing and profiteering.Â
To protect against this form of abuse, many patent systems have historically made provision for the granting of compulsory licences that allow for the introduction of generic competition without the patent holder’s consent. At Doha, the WTO reaffirmed that member states have the right “to grant compulsory licences” and “the freedom to determine the grounds” upon which such licences are granted. By authorising generic manufacturers to enter the market compulsory licences force patent holders to compete for sales, driving prices down.
Neither Trips nor the agreement struck at Doha restrict the use of compulsory licensing to local production — for countries with no pharmaceutical manufacturing capacity the ability to import is crucial.
For as long as medicines are produced in countries where they are not protected by patents, as is the case with most anti-retrovirals in India, international trade law is no obstacle. But as producing countries implement their Trips obligations and provide full patent protection for pharmaceutical products the supply of generics will inevitably dwindle.
Developing countries with no manufacturing capacity will be at the mercy of producing countries because, in terms of Trips, products produced under compulsory licence can only be exported if the main purpose behind issuing the licence is to satisfy domestic demand.
The WTO recognised this problem at Doha, instructing “the Council for Trips to find an expeditious solution … and to report to the General Council before the end of 2002”.
Now, with the resumption of world trade negotiations in Cancun less than two weeks away, agreement has finally been reached.Â
But consensus has come at a terrible cost to the developing world because the deal does not adequately resolve the problem identified at Doha. It still leaves importing countries without manufacturing capacity at the mercy of exporters such as South Africa — requiring that compulsory licences be issued in both importing and exporting countries.
In contrast, European Union law allows for exports “to a third country that has issued a compulsory licence … or where a patent is not in force and if there is a request to that effect”. Thus all that is required under EU law for the manufacture in and importation of generics from a producing country is the ordinary compulsory licensing process, devoid of complex, costly and risky procedures. What’s good for the French goose is apparently not appropriate for poor Uganda.Â
In addition, the new agreement introduces a complex web of hurdles and obstacles that must be overcome before cheaper medicines can be procured by developing countries. These include establishing that the country has insufficient or no manufacturing capacity in the pharmaceutical sector for the product.
So what are the implications for South Africa? Simply put, the agreement is not particularly significant for us. For some time South Africa has been able to source generic anti-retrovirals from abroad. We also have the capacity to produce our own generic drugs, though our ability to produce medicines at the cheapest possible price relies, to some extent, on our ability to export widely. Increased economies of scale translate directly into cheaper costs of production. The agreement, at least in theory, will enable us to increase exports significantly.
But we must take all reasonable steps to ensure that poorer nations access cheaper medicines. Armed with our manufacturing capacity, we must make the new agreement work, despite its fundamental flaws.
If we don’t, we run the risk of being no better than those who seek to impose unfair and unjust rules on the poor.
Jonathan Berger is in the Aids Law Project’s law and treatment access unit.