United States and European Union trade officials this week declared that they support bids to allow resource-limited countries to issue compulsory licenses that permit the importation of cheaper generic versions of antiretrovirals. However, they still favour restrictions on who can issue compulsory licenses that will tie up drug access in red tape, according to critics such as Oxfam.
The declarations came ahead of a three day World Trade Organisation meeting in Geneva, which has been wrangling over who exactly should be allowed to import cheaper generic drugs, and what the rules should be.
At last year's Doha WTO summit, participants agreed that countries facing health emergencies could use compulsory licensing to manufacture or import patented drugs they could not afford, if a generic version was available more cheaply.
The key sticking point is that current compulsory licensing provisions only allow countries with pharmaceutical manufacturing capacity to issue licenses for domestic producers to make generic drugs cheaper than patented versions. Three proposals are on the table to allow countries to import and export generic drugs.
A proposal backed by Brazil, China, India and Thailand amongst others, and supported by non-governmental organisations such as Medecins sans Frontieres and Oxfam, is to allow countries to issue compulsory licenses and for manufacturers of generic drugs to be able to respond to those licenses by exporting drugs without any delay.
European Union proposal could make generic imports off-limits for South Africa
However, the European Union is proposing that the exporting country must also issue a compulsory license, a step which Ruth Mayne of Oxfam described as unacceptable. “A poor country shouldn’t be dependent on a richer country to address its heath needs” she told aidsmap.
Oxfam and other NGOs are concerned that this step will introduce unnecessary delay into the process, and offer another target for big pharmaceuticals to challenge through the courts and the World Trade Organisation. The EU proposal is also confined to least developed and low income countries with no manufacturing capacity, a classification which could exclude countries like South Africa.
Europeans are also proposing that both exporting and importing countries will have to take responsibility for preventing re-exporting of generic drugs
US proposals criticised as `procedural hoops`
The United States is proposing that countries which need to issue a compulsory license should seek a waiver, but only after investigating drug company price reduction offers for branded products and proving that they have next to no local capacity to produce drugs themselves. Brook K. Baker of Health GAP Coalition comments that this will place a huge procedural burden on countries attempting to use compulsory licensing. “One has to wonder if the purpose of these procedural hoops is to protect the minor, mostly theoretical interests of Big Pharma”, he said.
The United States is also seeking to restrict compulsory licensing, and its proposal for a moratorium or waivers, to a few named diseases, such as AIDS and TB, notes Ruth Mayne, rather than giving states the right to define health emergencies for themselves.
African delegates to the WTO meeting highlighted the need to draw the definition of pharmaceutical products wider than just drugs, to cover diagnostics too.
They also criticised current promises within the TRIPS agreement to pay compensation to patent holders when compulsory licenses are granted, pointing out that countries that issue compulsory licenses are already short of money when they choose to use the process. Compensation needs to be funded by an international mechanism, they argue.
Compulsory licenses could also be granted at a regional level where a free trade area exists, so that pharmaceutical manufacturing capacity in one country could develop economies of scale by meeting needs in neighbouring countries. This proposal could be particularly relevant in southern Africa and South America.
TRIPS: whatever the deal, it favours patent holders in the long run
However, even if an agreement on compulsory licensing is reached, the TRIPS agreement will still favour patent holders over time, because after 2005 countries like India will not be able to make their own versions of drugs patented from that point onwards. So, drugs to fight drug resistant strains of HIV will remain securely in the hands of big pharmaceutical companies, says Ellen T'Hoen of Medecins sans Frontieres. Companies are likely to seek patents in any country with pharmaceutical manufacturing capacity, to prevent the development of generic versions under compulsory license which might then become available for export.