Canadian generic AIDS drugs to be exported to Rwanda, but TRIPs remains inequitable and inappropriate

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On the 4th of October, the WTO released a statement announcing that Canada has become the first country to notify the WTO that is had authorised a company to produce a generic version of a patented medicine for export. This makes available the AIDS drug TriAvir to Rwanda, which lacks the domestic capacity to produce it. While this is to be welcomed in that it will provide relief to some of Rwanda’s AIDS sufferers, it should not be taken to indicate that the problems with the WTO’s Trade Related Intellectual Property Rights (TRIPs) agreement have been dealt with.

Background

This is the first time the Decision on TRIPs and Public Health reached at the WTO ministerial meeting held in Cancun in August 2003 has been made operational. The Decision built on the Agreement on Trade Related Intellectual Property Rights signed as part of the Uruguay Round of trade negotiations. TRIPs stipulated minimum standards of copyright and intellectual property protection that WTO member states had to apply.

The agreement subsequently received a great deal of criticism by NGOs and academics, particularly for raising the costs of AIDS drugs to poor countries which had previously been importing generic drugs. TRIPs allowed for member states to issue ‘compulsory licenses’, which in effect suspended patent protection, for the manufacturing of generic drugs to cope with health emergencies. However, these could only be authorised ‘predominantly for the supply of the domestic market’ and could not be exported. Therefore those countries lacking the domestic capacity to produce pharmaceutical products were unable to make use of the provisions for granting compulsory licenses. The Decision made in 2003 was taken as part of the Doha Development Agenda to rectify this situation and allow the importation of generics for public health purposes, notably to combat the AIDS crisis.

Continuing Problems

The notification by Canada is the final stage in the process of making available cheaper AIDS drugs to Rwanda and is therefore to be welcomed. However, problems with TRIPs remain. Firstly, the Decision, though an improvement, has been criticised for requiring an onerous and bureaucratic process to be completed before a compulsory licence can be granted. This is part of the reason why it has taken four years for the first case to make use of the new provisions.

Secondly, the August Decision is currently of insecure legal standing. The 2003 Decision was a waiver of the relevant TRIPs articles. In December 2005 at the Hong Kong Ministerial Meeting the members agreed to make the Decision a permanent amendment to the TRIPs Agreement. However, for this to come into effect it has to be ratified by two thirds of the member states before 1st December 2007. So far, only seven members have done so. In Europe, the European Parliament has refused to ratify it until EU member states commit to do more to help developing countries manufacture and import medicines at affordable rates (see BRIDGES). If the required number of ratifications is not met, the waiver will expire on the 1st December.

Thirdly, while the Decision is useful in providing relief for some developing countries with respect to access to pharmaceutical products, it does nothing to alter the basic TRIPs agreement, which has been condemned across the range of political and economic thinking as being inappropriate for developing countries, from Jagdish Bhagwati, a staunch advocate of orthodox trade theory, to Ha-Joon Chang, an advocate of very much unorthodox trade theory. The strong intellectual property rights protection embodied by TRIPs raises the costs of access to technology for those countries seeking to catch-up with the advanced countries. It flies in the face of the historical lessons taken from all countries that have successfully industrialised, which suggest instead that countries need to be able to copy technology for a period of time while they catch-up and introduce stronger intellectual property rights protection only when they are in a position to begin to produce their own patents.

Therefore important problems remain. While the action by Canada and Rwanda must be welcomed, it should not be taken to signify a resolution of the problems associated with TRIPs. TRIPs was written by the advanced countries of the WTO, which are also its chief beneficiaries – to the tune of approximately $8.3 billion a year to just six industrialised countries, with the US accounting for $5.8 billion of that (see K Maskus, Intellectual Property Rights in the Global Economy). The Decision of 2003, however implemented, does not alter the basic economic inaptitude and perniciousness of forcing stringent intellectual property protection on less developed countries.

James Scott

The University of Manchester

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