ICC/AIPLA - September 13, 2002 The Future of TRIPs: Impact of the Doha Health Declaration: ICC/AIPLA - September 13, 2002 The Future of TRIPs: Impact of the Doha Health Declaration The view of European Industry
David Rosenberg, Manager Industry Affairs, Corporate Intellectual Property, GlaxoSmithKline
Topics to be covered: Topics to be covered Background to the 31.f issue
Solutions proposed
Possible effects of the solution
Conclusions
Disenchantment pre-Doha: Disenchantment pre-Doha Globalisation
Perceptions about the WTO - substance (favours the North) and procedures (Northern domination)
Perceptions about TRIPs - cost and benefit, TK, “one size fits all”
Perception of TRIPs as a contributor to the global health crisis by requiring patents for medicines
The health crisis Disease Deaths pa New cases pa % in dev.world : The health crisis Disease Deaths pa New cases pa % in dev.world
TB 1.9 million 8.8 million 84
Malaria > 1 million 300 million c. 100
HIV/AIDS 3 million 5.3 million 92 (40 million HIV+)
“TRIPs is the problem”: “TRIPs is the problem”
High prices are a key factor restricting access
Generic competition would reduce prices and increase access
Generic competition is a key part of the solution
Patents prevent generic competition
Therefore, TRIPs is the problem
The effect on the Doha Ministerial: The effect on the Doha Ministerial
Developing countries suspicious of a new Round and growing in negotiating confidence
US and EU wanted a new Round but not to give up protection of “key interests” e.g agriculture and textiles
TRIPs became topic of media focus and the key element in a compromise
CL for export - the 31.f “problem” and the Doha mandate: CL for export - the 31.f “problem” and the Doha mandate Doha stated no limits in TRIPs on grounds for compulsory licensing
Art 31.f - CL must be “predominantly for the supply of the domestic market”
WTO Members “with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under TRIPs”
Solve it by end 2002
Mechanism for implementing the “solution” - 1: Mechanism for implementing the “solution” - 1 Article 30 interpretation - can’t be done as effectively amends 31.f; “solution” will not be effectively restricted - developing world
Delete Article 31.f - Africa Group
“Interpretation” and deletion will have effects on other industries beyond Doha mandate
Amendment of TRIPs to revise Article 31.f - Pandora’s box; delay - EU
Mechanism for implementing the “solution”- 2: Mechanism for implementing the “solution”- 2 Decision/Moratorium on dispute settlement under strictly defined conditions - political acceptability?
Waiver of 31.f obligations under strictly defined conditions - political acceptability?
UNICE (and US) support either. Pharmaceutical industry supports waiver
Countries of export, transparency, and diversion: Countries of export, transparency, and diversion Exporting countries to be developing countries only - US agree, EU undecided, opposed by some others
“Solution” must operate in a transparent manner - patent owner, WTO and WTO Members should know what’s happening where - seems to be accepted in principle but details unclear
Diversion of products must be prevented - yes, but how? Additional obligations on WTO Members?
“Members with insufficient manufacturing capacities in the pharmaceutical sector”: “Members with insufficient manufacturing capacities in the pharmaceutical sector” Active ingredient or final formulation?
Ability to manufacture pharmaceuticals (the Doha mandate) or the particular product?
Do states or companies have this capacity? What if company has it but wishes to produce other products?
EC - product by product approach, ignoring patent owner capacity - states to self-select according to (as yet undefined) objective criteria
Will this criterion ultimately comprise any practical limitation?
Which countries should be allowed to import? - 1: Which countries should be allowed to import? - 1
1. All?
2. All developing?
3. All least developed and the poorest developing?
Which countries should be allowed to import? - 2: Which countries should be allowed to import? - 2 Industry - only least developed and poorest developing countries (with properly defined and restricted manufacturing capacity criteria) will be acceptable
US and EU appear to agree but not clear
Many developing countries appear to want all developing countries with meaningless manufacturing capacity criteria
Will the US and EU accept this?
What should the disease scope be?: What should the disease scope be? Industry - HIV, TB, malaria and other epidemics
Para 1 Doha Declaration gaining support - “public health problems afflicting many developing and least developed countries, especially those arising from HIV/AIDS, TB, malaria and other epidemics”
What does this mean? Everything except “lifestyle” diseases? Brazil wants “at very least constructive ambiguity”
Potential outcome and legal effect of a broad “solution”: Potential outcome and legal effect of a broad “solution” TRIPs will permit CL for export for all but “lifestyle” products to vast majority of developing and least developed countries
For pharmaceuticals, the rights conferred by TRIPs for most products and most countries in the developing world will be reduced to a right to a small royalty
Will this actually help alleviate the access problem?: Will this actually help alleviate the access problem?
Only if patents are a barrier to access
Only if generics supply greater quantities of products at significantly reduced prices
And only if the “solution” does not cause other harm
Are patents a barrier to access?: Are patents a barrier to access? >95% of drugs on WHO EML are not patented but 30% of those who need them don’t get them. 3 million deaths p.a. caused by TB and malaria cannot be caused by patents
Most ARVs not patented in most of Africa, but most patients who need them don’t get them
No patents in India - several local generic ARV producers - 580,000 patients need ARVs - 20,000 patients get them
Will generics significantly increase supplies?: Will generics significantly increase supplies? India has said it does not want to be the social supplier to the developing world
Head of Brazil’s HIV programs says doubling of Brazil’s ARV production would make minimal impact on the 6 + million people currently needing ARVs and drain resources needed internally for e.g. malaria
The evidence to date of a “generic solution” does not suggest it will work
Poverty is the real problem: Poverty is the real problem >50% of world population lives on < $ 2 per day
Many developing countries spend < $10 per year per head on healthcare
Although malaria & TB can be treated at low annual cost, they are not
HIV treatment costs $1-3 per day
Lack of political will and poverty cause inadequate infrastructure
Without new funding (which the North appears reluctant to give), the poorest countries and their citizens cannot afford drugs at any price
Without opening up Northern markets to Southern goods (which the North is reluctant to do), poverty is unlikely to be alleviated
The effect of a broad solution: The effect of a broad solution As the poorest cannot afford at any price, and as generics do not satisfy demand now, long-term significant increase in patients being treated with affordable generics with blanket compulsory licensing unlikely
Generic supplies will, however, undermine the profitable private markets (comprising wealthier patients) of the R&D industry, particularly in the poorest countries where there is least public healthcare
Consequences in poorer country markets?: Consequences in poorer country markets? Reduced incentive to expend resources needed to launch new products. If no launch by innovator, no market for generic
Reduced ability of generics to launch as no local regulatory approval to piggy back
Reduced incentive to provide local employment, product support and medical education
Reduced product access and infrastructure
The need for R&D incentives: The need for R&D incentives “IP protection is key to bringing forward new medicines, vaccines and diagnostics urgently needed for the health of the world’s poorest populations” Kofi Annan, April 2001
“Partnerships between the public and private sectors can provide incentives for pharmaceutical companies to invest in the research and development of new tools to fight the diseases of poverty. Such incentives must create confidence that there will be viable markets for more effective and affordable tools when they are developed. “Scaling up the response to infectious diseases - A way out of poverty”, WHO, 2002
Effect of a broad “solution” on future R&D: Effect of a broad “solution” on future R&D Without strong IP (or some other form of exclusivity) there will be no confidence of viable markets
A broad “solution” will substantially undermine the exclusivity of the rights provided by TRIPs
If no exclusivity in developing world, where is the incentive to spend the $ 800 million needed to bring new products for the developing world to market?
By weakening IP, reduce incentive for technology transfer, an increasing demand of the developing world
In summary..: In summary.. Patents aren’t a barrier and Article 31.f is not a real problem
A broad “solution” to an unreal problem will not contribute to solving the access problem, but may even make it worse
The true solution involves all sectors of our global society working together in new kinds of partnerships to find new solutions to the problems of access and poverty, and the North providing more funding to deal with the existing access crisis
And what of 31.f?: And what of 31.f? A broad “solution” cannot be positive and may well have negative effects on access, technology transfer and R&D
It is a “solution” only for a political problem which only helps politicians, not patients
The “solution” must preserve the IP which is needed for new medicines
Politicians must rise above the rhetoric and political expediency and do the right thing
Limit the scope of the solution and increase funding