Though the Doha Declaration was initially received very well, anxiety again was widespread as about the interpretation of Paragraph 6 of the Declaration specifying when countries can import drugs produced elsewhere under compulsory Licensing(CL). A decision regarding the same was announced in 2003 and was adopted in the form of waiver of Article 31 (f) (that the compulsory Licensing(CL) would be predominantly for the supply of domestic market) in December 2005. As per this waiver, a country could issue a compulsory license on the basis of public health need either for domestic use or for export.
Countries which want to import under the Paragraph 6 of the Doha Declaration, system has to notify WTO in two ways, once when they intend to make use of the system(namely to import a drug under compulsory license) and they have to supply information whenever they use it. However, least developed countries need not notify the WTO as an eligible importing member. While the WTO provision requires that members notify their intention to be an eligible importing member, they also have to notify the WTO whether they would use the system in whole or in a limited way. For instance, the eligible importing member has to state whether they would use the system as a whole(i.e. to satisfy their access to medicines needs) or in a limited manner in the sense that they would use it only in national emergency or other circumstances of extreme urgency. In this context, some members have announced that they would not use this provision as an importer while some other members have notified that they would avail the facility only under situations of national emergency or extreme urgency.
When a country wants to import, it has to provide the following notifications to the Council:
1 The name of the product to be imported and the expected quantities of the product to be imported
2 The country in question has also to establish that it has insufficient or no manufacturing capacity in the pharmaceutical sector for the products mentioned
3 If the product is patented in the member wanting to import, the said country should also provide confirmation regarding the grant of compulsory license or its intention to grant a compulsory license
4 These notifications have to be made available publicly or through the WTO website.
Following this, Rwanda on 17 July 2007, became the first country to inform the WTO about it’s intention to import cheaper generics under compulsory licensing elsewhere as Rwanda is unable to manufacture the medicines locally.
The permanent amendment to the Article 31 (f) of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement has allow any member country to export pharmaceutical products made under compulsory license. Such countries will have to change their or national laws also. Already several members of WTO have informed the WTO that they have already amended their national laws. Though all WTO member countries can avail the system, 23 developed countries decided that they would not use the system to import the drugs. A number of countries like Hong Kong, China, Israel, Korea, Kuwait, China, Mexico, Qatar, Singapore, Chinese Taipei, Turkey and the United Arab Emirates have announced that if they use the system (of CL) as importers it would only be for emergencies or extremely urgent situations.
According to WTO, amendment of Article 31 (f) of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement is in three parts. They deal with (1) permitting pharmaceutical products made under CL to be exported to countries lacking production capacity, (2) avoiding double remuneration to the patent holder, regional trade agreements involving least developed countries and (3) non violation and retaining all existing flexibilities under the TRIPS Agreement.
The waiver and the subsequent amendment have been described by the former Director General Supachai Panitchpakdi as ‘it proves once and for all that the organization can handle humanitarian as well as trade concerns’. The decision covers all pharmaceutical patented products, or products produced using patented processes, active ingredients, and diagnostic kits.
As per the Paragraph 7 of the Doha Declaration, least developed countries need not protect pharmaceutical patents and test data until 1st January 2016. They also need not provide exclusive marketing rights for patent applications till 1st January 2016. However, the least developed country member has to establish that the said country does not have manufacturing capacity to produce the said product in question. Also under the conditions, the exporting country would be manufacturing under the CL only the expected quantities required for export. This product would be clearly distinguishable through packaging colouring and also ensure that such a distinction does not have an impact on price. These special features need to be put on the website.
The WTO also notifies that where a CL is granted by an exporting member under the system, adequate remuneration shall be paid to the member taking into account the economic value of the product to the importing member. The condition also states that the products imported under the system is used for public health purposes alone and prevent the re-exportation of the products that have actually been imported. In case least developed country member experiences difficulty in implementing the provision, developed country members shall provide on request and on mutually agreed conditions, technical and financial cooperation in order to facilitate its implementation.
As mentioned in the Paragraph 5 (b) of Doha Declaration on the TRIPS Agreement, where the members can decide on the grounds on which CL could be issued, Musungu and Oh lists the seven possible grounds that are currently in practice in different countries. These are: (1) refusal to license by the patent holder to enter into a voluntary licensing agreement on the reasonable commercial terms offered by the applicant (2) Public interest: Though most patent laws do not define public interest or provide a non-exhaustive or illustrative list of may constitute public interest, granting of compulsory licensee(CL) on the grounds of public interest are common in most patent laws (3) Public health and nutrition: A compulsory license may be granted on the grounds that the interests of public health and nutrition including that of the need to ensure availability and affordability of medicines require it (4) National emergency or situation of extreme urgency: Most countries provide for the use of patented inventions without the consent of the patent holder in emergency situations such as war, famine, natural catastrophe etc. In such situations, prior negotiations are also waived. (5) TRIPS Agreement itself states that the CL could be used to correct anticompetitive practices. Here again the prior negotiations for a voluntary license are waived along with exports under the CL. However, these should be provided for in the domestic law. (6) A compulsory license may also be granted where a new invention requires the use of a pre-existing patent (7) Failure to exploit or insufficiency of working: If a patent has been granted but the invention is not being exploited in the territory of the country or is insufficiently exploited, this may constitute a ground for granting of CL. However, Article 27.1 of the TRIPS Agreement has been interpreted as to exclude possibility of requiring the local working of a patented invention. But the Doha Declaration provides the WTO members to determine the grounds for the granting of CL. Here it may be interesting to cite the example of Brazil, which when had to amend its patent laws to suit the international IPR regime, introduced a provision to issue a CL if the patented medicine is not produced in the country within three years of the issue of the patent. Using this provision, Brazil issued a CL for Nelfinavir (produced by Roche), Lopinavir/Ritonavir (product of Abott) and Efavirenz (product of Merck), to reduce the prices of these medicines, which forced the companies to reduce the price. Though the US challenged this decision of Brazil, it withdrew its complaint. After a considerable negotiation, the companies agreed for price reduction in return of not to use CL option by Brazil. It was eventually agreed between the two countries that Brazil would first consult the US if it intended to make use of the local working provision.
In any case, the prior requirement in utilizing the Doha Declaration to the fullest level is in incorporating the necessary clauses in their national laws so as to utilize the flexibilities, followed by the willpower to withstand the international pressures. Though the Doha Declaration enables utilization of flexibilities, yet, countries coming under the FTA scanner have restrictions and have to look for ways to get access to medicines as these are the cases where the regional trade agreements become more powerful than the multilateral agreements. However, as the discussion highlighted, the movement of utilizing the CL as facilitated by the Doha Declaration gains more momentum, the role of drug cartels could be reduced with more contribution by generic producers such as India and Brazil.
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