South Centre Side Event to the WTO TRIPS Council highlights recommendations by the UN Secretary General’s High Level Panel on Access to Medicines
By Mirza Alas and Viviana Muñoz Tellez
On March 1st 2017, the South Centre together with the United Nations (UN) Secretariat of the High Level Panel on Access to Medicines, and co-sponsored by the Governments of India, Brazil and South Africa, held an event on the Report of the UN Secretary General’s High Level Panel on Access to Medicines.
As a side event to the WTO TRIPS Council, it provided an opportunity for WTO members, observers and all interested stakeholders to engage in an open discussion with some Members of the High-Level Panel and its Expert Advisory Group. It also provided input to the formal WTO TRIPS Council session on the agenda item on the High Level Panel report.
Dr. Suerie Moon, the Director of Research, Global Health Centre and Visiting Lecturer of the Graduate Institute of International and Development Studies, in opening the event, highlighted the importance of discussing the UN High Level Panel’s recommendations, particularly at the WTO. The UN Secretary General convened the panel at the UN’s highest level. This reflects the realization that health and access to medicines is not an issue that can be resolved primarily or only by the health sector. It requires contributions by all sectors including trade. It is significant that WTO Members are discussing the report at the TRIPS Council.
Ms. Moon noted that the initial idea of the High Level Panel came out of the Global Commission of HIV and the Law that recommended the UN Secretary General to find a way to remedy the policy incoherence between the justifiable rights of the inventors, international human rights law, trade rules and public health in the context of health technologies. Ms. Moon pointed out that the panel was convened in 2015 with two former Heads of State as Co-chairs, Ms. Ruth Dreifuss and Mr. Festus Gontebanye Mogae.
Ms. Moon also observed that the Secretary-General convened this panel in the context of transitioning from the Millennium Development Goals into the Sustainable Development Goals (SDGs). SDG 3 in particular focuses on health. Access to medicines has to be guaranteed for people in all countries and for all diseases and across all technologies – not only medicines and vaccines but other types of technologies as well. Health is not only contained exclusively in SDG3. Health should be understood as precondition, indicator and outcome of sustainable development. It is interlinked with all the other SDGs.
Ms. Ruth Dreifuss, Co-chair of the High Level Panel and Former President of Switzerland, was the first panelist to take the floor. Ms. Dreifuss drew emphasis on the mandate of the panel and made a call to make transparency a central topic in the discussions on innovation and access to medicines.
Ms. Dreifuss noted that the Panel mandate was both broad and very narrow. The mandate was broad because the context is no longer what it was 10 years ago in which access to medicines was seen as a problem mainly of poor countries and transmissible disease. During these 10 years the problem of access to medicines has become a truly global problem. The burden of diseases today is higher for Non Communicable Diseases (NCDs). It is in this area where the cost of new medicines is the highest today. How to deal with transmissible diseases is now known, and knowledge for how to deal with new epidemics is improving, as in the case of HIV. In contrast, medicines for cancer and medicines for neurodegenerative diseases are the biggest expense for all countries and no longer only for people who pay out of pocket but also for people in countries providing universal coverage. They are now struggling with having to introduce health rationing because of the high price of these treatments.
The aim of the panel was not to only look at medicines, vaccines but also at the important issue of diagnostics and medical devices. As a Minister of Health for 10 years, Ms. Dreifuss witnessed that the issue of medical devices was often neglected, more so than the issue of medicines. This being so despite the fact that the prices of medical devices are heavily influenced by patents. Moreover, the link between medicines and medical devices can render the prices of some treatments very expensive. Even for medicines that no longer have a patent, the prices may be very high, because they are delivered through medical devices that are patented.
Ms. Dreifuss then focused her presentation on the section of the report that dealt with governance, accountability and transparency. She highlighted that there is a clear need for transparency in an innovation system in which there is strong collaboration between public and private sectors and where the public sector is financing basic research. Some medical technologies, as in the case of vaccines, have been largely developed by the public sector and through public financing. In medical innovation, the pharmaceutical industry has an important role to play, as well as regulatory and procurement authorities. The public sector acts to promote access to good quality medicines.
Currently, in the chain there is a “black box”. It is a box of not knowing what is the system of production of new knowledge inside the pharmaceutical industry, now knowing what are the true costs of research and development (R&D) and how they are pricing final products. One of the boldest and strongest recommendations of the panel was to put light into this black box.
In looking forward, it will be important to gain more light of why certain health needs are not met by pharmaceutical companies and on how the negotiation of prices between pharmaceutical companies and public authorities occur. There is a need to ensure this is done in a fair way so that what is paid by the public, usually at the beginning of the R&D process, will not be paid again through high prices.
Mr. Celso Amorim, Chairman of the UNITAID Board, former Minister of Foreign Affairs of Brazil and member of the High Level Panel, focused on the recommendations of the High Level Panel report on the use of flexibilities contained in the TRIPS Agreement and the impact of TRIPS plus obligations on policy space for public health. Mr. Amorim noted that as ambassador at the WTO when the TRIPS agreement was negotiated and agreed, he was reluctant to agree because of the restrictions imposed by the agreement on Brazil’s capacity to industrialize, despite the “ambiguities” contained in the agreement that could be used. Mr. Amorim reflected on the evolution of the debate, noting that challenges such as HIV AIDS changed the political context. The United States brought a legal challenge against Brazil concerning the intellectual property law but was unsuccessful. This was part of the process when “ambiguities” became “flexibilities”. The reaffirmation of flexibilities is embodied in the Doha Declaration on TRIPS and Public Health. The Doha Declaration in paragraph four states that WTO members agree that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, 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.
Mr. Amorim stressed that the main challenge in using the flexibilities has been the strong political pressure that countries have had to face. Mr. Amorim echoed the UN High Level Panel recommendation that WTO Members should commit themselves at the highest political level to respect the letter and spirit of the Doha Declaration on TRIPS and Public Health. If presidents and prime ministers don’t respect this agreement, he said, it won’t be given the importance that it needs to have. Mr. Amorim observed that countries have faced threats that go beyond trade, so they refrain from issuing compulsory licenses and other measures for public health. He urged WTO members to consider the recommendation by the High Level Panel on the use of the trade policy review process to object to such pressures.
What is at stake here, he said, is not only intellectual property and access to medicines, but also the future of multilateralism. The pressures that have been applied are contrary to what has been agreed. Mr. Amorim urged for take up of the measures proposed by the High Level Panel.
H.E. Mr. Evandro Didonet, Ambassador of Brazil to the WTO, recalled that Brazil has been a key player in the WTO discussions on intellectual property and access to medicines, and continues to believe that these issues should not be mutually exclusive. IP rights should be implemented in a manner that is conducive to social welfare. Accordingly, the TRIPS flexibilities serve the purpose of providing policy space. Moreover, there must be a balance between IP and health. This remains the policy of Brazil which has not been affected by changes in government. It is Brazil’s state and foreign policy.
Mr. Didonet said that the status of domestic procurement of medicines is concerning. For Brazil the cost of medicines procurement by the Ministry of Health has increased as much as 10% in real terms every single year from 2004 to 2013 with medicines alone accounting for 15% of the budget for 2014.
Mr. Didonet noted that Brazil asked for the inclusion of the High Level Panel report in the agenda of the TRIPS Council and would like to focus on what the panel has recommended in terms of what can be done at the WTO. Mr. Didonet said that the entry into force of the TRIPS amendment was in line with the recommendations of the panel and that it provides a much more solid legal framework for countries that wish to import medicines through compulsory licenses. He cautioned that there is still work to do in the implementation of the Protocol and called on the WTO Secretariat to provide technical assistance for countries to take the necessary legal measures to incorporate the Protocol into their national legal systems.
Mr. Didonet recalled that the Panel recommended that governments that engage in trade negotiations should not include provisions that go against the right to health. He noted that Brazil does not negotiate TRIPS plus provisions in trade agreements.
H.E. Mr. Shameem Ahsan, Ambassador of Bangladesh, expressed that the report of the High Level Panel is very significant and a bold step. The High Level Panel calls for change, not only in the current IP production and marketing regime. It also calls for change of our ideas and approaches. He noted that additional useful observations and recommendations could not be included in the report due to lack of consensus. Mr. Ahsan highlighted that LDCs will use occasions at different fora to raise and discuss the High Level Panel report to find ways to implement the worthwhile recommendations for the benefit of all.
Mr. Ahsan described that we are now witnessing the progress of the fourth industrial revolution. Science and technology had never facilitated our life better than today. However, humanity today is at a crossroads. On one hand the scientific knowledge, technological developments, infrastructure and productive capabilities are tremendously benefitting few of us while majority are still out of the benefits originating from them and many a times these advancements are creating more divide than gains for everyone due to our own gaps and failures. Against this backdrop, while we consider that right to life is the most fundamental right, then the next most immediate right, i.e., right to health cannot be far behind. With this goal in view, we are fortunate to have this report of the High Level Panel, to ensure and establish our right to health and subsequently, the right to life and achievement of SDG 3.
Mr. Ahsan further stated that although access to health and medicine are equally important for all the countries, whether developed, developing or LDCs, when it comes to ensuring physical access, the LDCs are the hardest hit. The UN High Level Panel report put forward many important recommendations applicable for all the countries irrespective of their level of development. It firstly mentioned the lack of development of medicines for Neglected Tropical Diseases from which an estimated 1.7 billion peoples are suffering. To overcome this, the report observed that coordinated and collaborative efforts of public-private partnerships and product development partnerships (PDPs) had been key in bringing together the resources and strengths of the private, philanthropic and public sectors to innovate and deliver several important health technologies. Here, both private and public sectors in the LDCs are extremely weak to undertake any such collaboration and investment. To implement this recommendation, LDCs will need active support and transfer of technology from the developed countries and their private enterprises.
Mr. Ahsan remarked that LDCs will support the recommendation to make full use of the TRIPS flexibilities, noting that LDCs currently benefit from a transition period under the TRIPS Agreement in terms of extending patent protection to pharmaceutical products, among others. Mr. Ahsan noted that the Paragraph 6 system is now officially a part of TRIPS Agreement. This should enable swift and expedient export of biomedical products from countries with production capacity to LDCs without production capacity. However, this will require genuine goodwill from the producers of medicine and the governments and the administrative authorities to facilitate production and transport unencumbered by any contrary supply-side or administrative action.
Mr. Ahsan also observed that balancing and rationalizing priorities in any free trade agreement is a recommendation that LDCs need to pay particular attention to since this is appearing more and more in FTAs and RTAs every day. In case of an LDC being member of any FTA or RTA, governments and the private sectors of other members of the same FTA/RTA must refrain from explicit or implicit threats, tactics or strategies that undermine the use of TRIPS flexibilities. In that case, is important to agree that in such instances of undue political and economic pressure this should be reported to the WTO Secretariat during the Trade Policy Review of those WTO Members. He also supported the recommendation that the LDC Governments should undertake public health impact assessments before they enter into such agreements.
He further elaborated that the Report recommends that public funders of research must require that knowledge generated from such research be made freely and widely available in peer-reviewed literature. Universities and research institutions that receive public funding should adopt policies that promote biomedical research and knowledge that benefit the public health objectives over financial returns in patenting and licensing practices, for example non-exclusive licensing, participation in public sector pools, and donation of intellectual property. However, public funding in LDCs is not common. Mr. Ahsan proposed that any patent grant awarded to an LDC that was supported by public funding should not require disclosure to public domain, and LDCs or their concerned entities should enjoy natural commercial benefit and data exclusivity which is associated with usual patent rights.
Mr. Ahsan stressed that LDCs would like to see a binding global R&D convention that delinks the costs of R&D from the end prices. He noted that LDCs would gladly participate in any negotiation to establish a Working Group for preparing a Code of Principles for Biomedical R&D, as proposed in the High Level Panel report. Given that LDCs acutely lack resources, it may not be possible for them to arrange, incentivize and reward public health R&D. An alternative source or model of funding is required. He noted that if developed countries sincerely carry out their obligations under TRIPS articles 66.2 on transfer of technology and 67 on technical assistance, this gap of funds and technology would be greatly reduced.
Mr. Ahsan also noted that LDCs want implementation of the High Level Panel recommendation that all the governments, both from the developed, developing and least developed countries, address the issue of access to medicines in the light of human rights principles. For the LDCs, beleaguered by multi-faceted political, economic and environmental problems, ensuring any kind of right to its people is always an uphill task. Mr. Ahsan thus requested patience if LDCs appear to be slow to deliver on this particular issue. To avoid gaps and duplication, LDCs also support the recommendation for an independent review body tasked with assessing progress on health technology innovation and access and also an inter-agency taskforce to increase coherence between multilateral organizations working on the same issue of health technology innovation and access, and hoped that the proposed UN General Assembly Special Session on health technology innovation and access could be convened by 2018.
Mr. Ahsan further pointed out that there are various factors which may impede access to required medicine in the LDCs but that the single most important factor is the cost and especially the cost of the patented medicines. It would be important for all manufacturers and distributors to disclose the cost of R&D, production marketing and distribution of their products, with each category separated, as recommended by the High Level Panel. Because marketing and distribution in an LDC will be of a fraction of the cost that is incurred in a developed country, this will in turn reduce the price of the medicine substantially in the LDCs. Data for clinical trials should also be made public, for the same reason. The WHO should establish and maintain a database of prices of patented, generic and biosimilar medicines in countries where they are registered. Similarly, with the help of WIPO, all Governments should establish and maintain publicly accessible databases with patent information status on medicines and vaccines including standard names for biological products, international non-proprietary names, dates of patent grant and expiry.
In closing, Mr. Ahsan stressed that while including TRIPS flexibilities in national legislation is essential, this alone does not guarantee implementation or assure any benefit, if the capacity to utilize them is missing.
Professor Carlos Correa, Special Advisor on Trade and Intellectual Property of the South Centre, emphasized that intellectual property should not constitute an obstacle for the realization of the right to health. He discussed in detail the role of three flexibilities in the area of intellectual property that were highlighted by the UN High Level Panel: rigorous patentability standards, compulsory licenses and competition law.
Mr. Correa stressed that the High Level Panel report can be used to encourage governments to change the law or the practices under the law. The report serves to add confidence that the IP flexibilities in the TRIPS Agreement are legitimate. The High Level Panel report adds evidence that countries can use this policy space in compliance with human rights obligations in the area of public health.
On the subject of patentability criteria, Mr. Correa emphasized the recommendation by the High Level Panel that high quality standards should be applied in the examination of patent applications in the area of pharmaceuticals. He noted that it is common for pharmaceutical companies to file for patents when there is no real innovation. There are multitudes of patents on polymorphs, salts or minor developments related to known medicines, which are the outcome of routine activities rather than inventive activities. The problem is that price competition is reduced because generics are not allowed to enter the market. Procurement practices are also affected, as well as subsequent research and development. Mr. Correa further explained that while there are some cases where changes to existing medicines may imply some improvement, as recognized in the report, it does not mean that a patent should be granted for the improvement.
Mr. Correa noted that the High Level Panel report recommends governments to look critically at how patents are examined in the field of pharmaceuticals. He pointed that despite the many problems, there are some good examples. Developing countries such as India, Argentina, Brazil and Egypt are applying rigorous standards for establishing whether or not there is an innovation and whether it merits a patent. Mr. Correa stated that some countries have suffered pressures for the application of these rigorous standards, yet those pressures have not led to changes to national policies. These pressures have also not led to formal complains. This is a confirmation that these policies are legitimate and are aligned to public health needs.
Mr. Correa noted that there are many organizations such as UNDP, South Centre and UNCTAD that can provide technical assistance and advice to countries to improve practices in the area of pharmaceutical patents. He emphasized that in many cases there is no need to change the laws when considering how patentability standards can be best applied. He stressed the importance for government to consider the High Level Panel recommendations on technical assistance to improve how patentability standards are applied.
Mr. Correa also discussed the recommendation of the High Level Panel report on the subject of compulsory licenses. Mr. Correa noted that the report makes it clear that compulsory licenses are legitimate and should be used as and when needed. Governments are not restricted to use compulsory licenses only in emergencies. Compulsory licenses can be applied on the grounds determined by national law. This is a flexibility confirmed by the Doha Declaration. Compulsory licenses are an important tool in order to ensure that public health objectives are attained. It is a tool that is not of exclusive interest for developing countries. It is a legitimate tool because the issue of medicines affects all countries. Mr. Correa stressed that referencing the High Level Panel report at the national level could help streamline the grant of compulsory licenses and prevent obstacles or burdens from parties requesting them. It can also serve to increase awareness that this tool should be available and used to satisfy public health needs.
Mr. Correa noted that the High Level Panel report provides evidence on this. Many cases of use of compulsory licenses show that it can be an effective tool to reduce prices and increase access to medicines. Mr. Correa recalled that there are many countries that have granted compulsory licenses, including Zimbabwe, Malaysia, Mozambique, Zambia, Indonesia, Thailand, Brazil and Ecuador. Some developed countries have also granted compulsory licenses. Mr. Correa noted that a large number of compulsory licences have been granted in the US. The US legislation is flexible in this regard, particularly for government use. Other good examples of developed countries using the compulsory licensing flexibilities in Europe can be found in Italy. Mr. Correa noted that most recently, Germany through its Federal Court issued a compulsory license on 31st August 2016 on grounds of public interest that benefited the firm Merck, recalling that paradoxically, the same firm was very hostile in Thailand for its grant of a compulsory license.
On the subject of competition law, Mr. Correa pointed out that it is often neglected in the analysis related to the TRIPS agreement. Competition law can help support policies to increase access to medicines. Competition policy may be used to deal with restrictive practices relating to licenses agreements and cases of voluntary licenses of pharmaceutical patents where restrictions are applied such as requirements to buy the active ingredient from the licensee source, price restrictions or restrictions on the geographical scope of the license. There are also situations of refusal by the patentee to grant a license under reasonable commercial conditions. Competition law can be applied in these cases of restrictive licensing conditions or excessive pricing. Cases of excessive pricing have been subjected to an investigation and remedies accorded by the competition authority.
Mr. Correa recalled that the purpose of competition law is not only for competitors but to protect consumers. He noted that competition law is underused in most developing countries, and pointed to a guide by the UNDP that is helpful in providing guidance on the application of competition law in the area of public health.
Q&A and Closure
Following the presentations, there was interaction between the audience and the panelists. Some of the issues discussed were the obstacles to the use of TRIPS flexibilities due to TRIPS plus provisions in trade agreements, the role of public health impact assessments, the role of the High Level panel in re-energizing the issue of access to medicines in relation to intellectual property, the need to discuss the High Level Panel report and its recommendations in more fora, the importance of new models for innovation and expanding consideration of deficits in innovation in broader disease areas, including non-communicable diseases.
To close the event, panelists emphasized the global nature of the access to medicines problem. It was noted that tackling the problem requires increased global collaboration and an inter-sectoral approach, integrating health, trade, human rights and intellectual property. A call was made for more in depth discussions in the TRIPS Council on the recommendations of the report, including those on rigorous patentability standards and use of compulsory licenses and competition law.
Mirza Alas is a Research Associate and Viviana Muñoz Tellez is the Programme Coordinator of the Development, Innovation and Intellectual Property Programme (DIIP) of the South Centre.
Resources:
The report of the High Level Panel on Access to Medicines is available at http://www.unsgaccessmeds.org/final-report/
For video feeds of this event, see https://www.facebook.com/SouthCentre/
For additional coverage of this event, see https://www.ip-watch.org/?s=side+event
