TRIPS and the Right to Health in Least Developed Countries. 1. Introduction

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1 1. Introduction TRIPS and the Right to Health in Least Developed Countries A number of UN and regional human rights treaties recognize the right to health as a basic human right. 1 The scope of States obligations with regard to the right to health has become a pressing issue since the WTO Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS) came into effect on 1 January In particular there has been a growing debate about how to balance intellectual property rights in pharmaceuticals and other medical treatments against the right to access life- saving medication and vaccinations. The TRIPS agreement came into effect on 1 January The agreement contained a provision in Article 66(1) that gives least- developed countries until 1 January 2006 to implement TRIPS into national law. 2 They were also granted a right to obtain extensions of that deadline based on duly motivated requests. While the TRIPS regime appears to frame the issue as a nearly zero- sum game of property rights vs. access to medicine, the World Health Organization has tried to find a way to strike a balance between the two by adopting a strategy that seeks to link intellectual property protections to supporting medical innovations that serve the needs of the poor. Section 2 below describes the TRIPS regime as it relates to Least- Developed- Countries access to pharmaceuticals. Section 3 presents the WHO s strategy, and section 4 presents a case illustrating the challenges of balancing intellectual property rights against the right to health. The questions to be answered in your exam paper are provided after the third section. Sections 2, 3 and 4 provide the background for writing your paper. The questions will provide directions with regard to how you should apply the theoretical material covered in the course to the issues and factual material presented in Sections 2, 3 and 4. 1 See The 1966 International Covenant on Economic, Social and Cultural Rights (ICESCR), The 1979 Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), The 1989 Convention on the Rights of the Child (CRC), The 1961 European Social Charter, The 1981 African Charter on Human and Peoples Rights, The 1988 Additional Protocol to the American Convention on Human Rights in the Area of Economic, Social and Cultural Rights (the Protocol of San Salvador). The International Covenant on Economic, Social and Cultural Rights (1966) in Article 12 states that steps for the realization of the right to health include those that: reduce infant mortality and ensure the healthy development of the child; improve environmental and industrial hygiene; prevent, treat and control epidemic, endemic, occupational and other diseases; and create conditions to ensure access to health care for all. General Comment on the Right to Health 2 Article 66(1) provides: In view of the special needs and requirements of least- developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, such Members shall not be required to apply the provisions of this Agreement, other than Articles 3, 4 and 5, for a period of 10 years from the date of application as defined under paragraph 1 of Article 65. The Council for TRIPS shall, upon duly motivated request by a least- developed country Member, accord extensions of this period. 1

2 2. TRIPS and Pharmaceuticals As a result of the 2001 Doha Declaration on the TRIPS Agreement and Public Health 3 and a 2003 WTO General Council Decision (hereinafter, the 2003 Decision ) 4, WTO Member states that are considered to be LDCs under the UN classification were exempted from having to implement the provisions of the TRIPS Agreement relating to the protection of pharmaceutical patents and clinical data until 1 January The objective of extending the deadline for LDCs to comply with TRIPS was to facilitate access to essential medicines especially for the countries with insufficient or no manufacturing capacities in the pharmaceutical sector. The 2003 Decision waived the export restriction on generic production of medicines and the decision is in the process of being made permanent. Under this waiver, countries that do not have their own drug manufacturing capability can issue a compulsory license so that another country or company in another country can manufacture generic drugs for them. However, potential exporting countries must amend their national laws to enable the production and export of generic medicines under compulsory license. Organizations such as Medecins Sans Frontiers have criticized the import mechanism for being unnecessarily cumbersome as it is based on a drug- by- drug, country- by- country and case- by- case decision- making process. In June 2013 the TRIPS Council issued a decision prolonging the LDCs exemption from enforcing TRIPs rules until 1 July It temporarily waives the obligation of LDCs to apply the provisions of the TRIPS, except for articles 3 (national treatment), 4 (most- favoured- nation treatment), and 5 (multilateral agreements on acquisition or maintenance of protection). Since the newly passed extension is for the full TRIPS agreement, it could be considered to apply to all products, including pharmaceutical products. Nevertheless, at the February 2015 meeting of the WTO TRIPS Council, Bangladesh offered a proposal on behalf of LDCs to extend the transition period for enforcing protections for pharmaceutical related patents and clinical data for as long as the WTO member remains a least developed country. At a meeting of the TRIPS Council on 24 February, 2015, Bangladesh, on behalf of LDCs, requested unconditional extension of the transition period for enforcing protections for pharmaceutical related patents and clinical data, for as long as the WTO member remains a LDC. Sources familiar with the meeting noted that the discussion on the proposal was brief, given that it was raised under other business rather than as a formal agenda item. 3 At the Doha Ministerial Conference in 2001, it was agreed that the least- developed country members would not be obliged, with respect to pharmaceutical products, to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement or to enforce rights provided for under these Sections until 1 January Those sections of the TRIPS Agreement deal with, respectively, patents and protection of undisclosed information. Furthermore, the 2001 ministerial declaration says that this decision does not prevent LDCs from seeking other transition period extensions as outlined under Article 66.1 of TRIPS. 4 The 2003 WTO General Council Decision allows any member country to export pharmaceutical products made under compulsory licenses within the terms set out in the decision. All WTO member countries are eligible to import under this decision, but 23 developed countries are listed in the decision as announcing voluntarily that they will not use the system to import. 2

3 The proposal is expected to be discussed in more detail at the next meeting of the TRIPS Council, currently scheduled for 9-10 June The WHO The World Health Assembly, which is the decision- making body of the World Health Organization (WHO), has tried to shift the debate from intellectual property versus access towards innovation- plus- access through its Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (GSPoA). The strategy was adopted in 2008 and is aimed at generating health- driven research and development that would strike a balance between promoting and protecting the right to access medicines, and the inventor s right to profit. Member States endorsed by consensus a strategy designed to promote new thinking in innovation and access to medicines, which would encourage needs- driven research rather than purely market- driven research to target diseases, which disproportionately affect people in developing countries. Given the history of the WHO, which often favors non- binding (soft- law) governance instruments as opposed to legally- binding norms, it is open to debate whether WHO could be resolute enough to push the GSPoA framework to confront the normative architecture of the WTO in a way that satisfies public health and trade- economic- IP interests in a win- win scenario. 4. The limits of TRIPS exemptions for LDCs: the case of Apotex After the 2003 Decision, Canada amended its patent laws, now known as Canada s Access to Medicines Regime (CAMR), to allow domestic production of generic drugs exclusively for export to a poor country. Apotex, a leading Canadian generic pharmaceutical manufacturer developed a new fixed- dose tablet combining existing ARV drugs into a single table that it intended to export under compulsory license to Rwanda. In its long product development process, Apotex held complex negotiations with three Canadian pharmaceutical companies before it finally got a compulsory license issued on 19 September Rwanda had already notified the WTO in July 2007 of its intention to use the 2003 procedure to import 15.6 million of Apotex s fixed- dose combination. It was the first country to do so. At the time of export to Rwanda, this generic single fixed- dose combination cost about US$0.40 per tablet as opposed to US$20 per tablet in the USA using the patented brands. Bruce Clark, Vice- President of Apotex, stated that the steps needed to produce generic drugs for export under CAMR are simply too difficult and complicated. As it is currently written, we will not use it again. The limits of the Canadian CAMR regime and the unwillingness of other industrialized countries to expand TRIPS flexibilities has left most developing countries with the only option of pursuing South- South cooperation. This could take the form of Foreign Direct Investment- driven joint ventures with countries like India and Brazil. In 2007, for instance, Uganda 3

4 commissioned a facility to produce generic ARV drugs locally in Uganda based on a joint venture with Cipla, an Indian generic pharmaceutical producer. 5 Some other African countries Ghana, Tanzania and Ethiopia have started exploring the feasibility of local production of generic ARV drugs along the lines of the Uganda- Cipla venture. Such initiatives have opened a new vista in the global governance of AIDS as countries like India and Brazil emerge as part of the Southern engines of growth and development. However, one major challenge for future South- South cooperation is the rapidly changing orientation of the pharmaceutical industry in BRICS countries because the WTO obliges these countries to amend their intellectual property laws to become TRIPS compliant. 5. Questions 1. How would (1) a positivist and (2) a realist explain the apparent conflict between states TRIPS obligations and their obligations to protect the right to health? Assume that there is a conflict for purposes of this question (regardless of whether you think there really is or not) and separate your arguments. 2. What would a realist advise the WHO and/or interested NGOs to do in order to advance the WHO s strategy to change the normative architecture of the WTO in a way that satisfies public health and trade- economic- IP interests in a win- win scenario or otherwise dissolves the conflict? 3. If there is there another theory that you think would be better than realism at devising an effective strategy for resolving the conflict between public health and trade- economic- IP interests, identify it and explain why you think it would be better than realism or any of the other theories studied in the course. 4. If you think realism is the best theory for understanding this issue and devising a strategy to deal with it, please explain why you think so. In answering these questions, test your arguments against the Apotex case and refer to the facts of the case as described in section 4 where relevant. You are welcome to include additional cases or factual material so long as you document your sources and include some reflections on the reliability of your sources. The exam is composed in such a way that it should provide you with ample opportunity to show how well you have fulfilled the course objectives, as they are stated in the course description and reproduced below. Please check your answer before you hand it in to make sure that you have covered all of them in some way. Maximum number of pages for your exam paper: 15 5 Available data from WHO and the Joint United Nations Programme on HIV/AIDS suggest that about 41 per cent of Ugandans in need of ARV drugs receive those drugs mainly from programs funded by the Global Fund to Fight AIDS, Tuberculosis and Malaria and the US President s Emergency Plan for AIDS Relief. 4

5 Course objectives: Identify and explain the main theories of international law and place them in historical context. Describe how the main theories of international law distinguish between international law and international politics. Identify and explain what role non- state actors (i.e. natural and legal persons, international organisations) play in international law according to the main theories of international law. Explain how international law, as it is currently understood by modern theories of international law, is relevant to the activities of international businesses and organisations. Apply the theories of international law studied in the course to specific cases involving issues relevant to international organisations or businesses. 5