The World Trade Organization (WTO) members approved measures to make it easier for developing countries to get cheaper generic versions of medicines for communicable diseases like AIDS. Changes to the WTO’s intellectual property agreement would make permanent a waiver currently in place to allow poor countries without their own pharmaceutical manufacturing capacities to import cheaper copies of patented medicines for humanitarian purposes.

Its general council has agreed to make permanent a 2003 waiver that allows poorer nations to import generic drugs to treat serious diseases such as Aids. WTO members have set Dec. 1, 2007, as a deadline to ratify the amendment, the organization said. It would need to be approved by two-thirds of the 148 members. The waiver remains in force until then.

The World Trade Organization (WTO) is an international rules-based and member driven organization which oversees a large number of agreements defining the “rules of trade” between its member states and is the successor to the General Agreement on Tariffs and Trade (GATT) that was set up in 1947, and operates with the broad goal of reducing or abolishing international trade barriers. It ensures trade among nations operates smoothly, freely and orderly.

As of August 19, 2005, there are 148 members in which most of them are developing countries in the organization. All WTO members are required to grant one another most favored nation status, such that (with some exceptions) trade concessions granted by a WTO member to another country must be granted to all WTO members.

US Trade Representative Rob Portman said that the U.S. was fully behind the move. The European Union (EU) and the UK has also backed the change. Under the rule, poorer nations will be allowed to import the generic drugs for humanitarian reasons and not for commercial purposes. Some of the larger developing countries, like India, hope that they will be able to sell antiretroviral Aids drugs to Africa under the deal.

Flexibilities such as “compulsory licensing” are written into the TRIPS Agreement — governments can issue compulsory licenses to allow other companies to make a patented product or use a patented process under license without the consent of the patent owner, but only under certain conditions aimed at safeguarding the legitimate interests of the patent holder.

But some governments were unsure of how these flexibilities would be interpreted, and how far their right to use them would be respected. The African Group (all the African members of the WTO) was among the members pushing for clarification. A large part of this was settled at the Doha Ministerial Conference in November 2001.

In the main Doha Ministerial Declaration of November 2001, ministers stressed that it is important to implement and interpret the TRIPS Agreement in a way that supports public health — by promoting both access to existing medicines and the creation of new medicines.

“TRIPS” stands for Trade-Related aspects of Intellectual Property Rights. It is an Agreement drawn up by the World Trade Organization between 1986 and 1994 to ensure intellectual property rights are respected within international trade. It came into force on 1st January 1995, although implementation dates vary from country to country.

Governments can issue a compulsory license if a patent owner abuses their rights by, for example, failing to offer their product on the market, or offering it at a price that is too high for potential buyers to afford. Competitors can then produce the product or use the process under government license without fear of prosecution. In the case of generic drugs, compulsory licenses can be issued because of the high (and for developing nations, often unaffordable) prices charged by the major pharmaceutical companies for their products.

Article 31(f) of the TRIPS Agreement says that production under compulsory licensing must be predominantly for the domestic market. The concern was that this could limit the ability of countries that cannot make pharmaceutical products from importing cheaper generics from countries where pharmaceuticals are patented. As with the 2003 waiver, the permanent amendment will allow any member country to export pharmaceutical products made under a compulsory license for this purpose.

Now, the amendment itself is in three parts. Five paragraphs come under Article 31 “bis” (i.e., an additional article after Article 31). The first allows pharmaceutical products made under compulsory licenses to be exported to countries lacking production capacity. Other paragraphs deal with avoiding double remuneration to the patent-owner, regional trade agreements involving least-developed countries, “non-violation” and retaining all existing flexibilities under the TRIPS Agreement.

A further seven paragraphs are in a new annex to the TRIPS Agreement. These set out terms for using the system, and cover such issues as definitions, notification, avoiding the pharmaceuticals being diverted to the wrong markets, developing regional systems to allow economies of scale, and annual reviews in the TRIPS Council. An “appendix” to the annex deals with assessing lack of manufacturing capability in the importing country. This was originally an annex to the 2003 decision.

The new Article 31 “bis” and annex of the TRIPS Agreement are attached to a protocol of amendment. This in turn is attached to a General Council decision, which adopts the Protocol and opens it for members to accept it by 1 December 2007.

See a Draft Text of the Changes here.

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