E-DRUG: EU on tiered price / Aug 30 / TRIPS amendment
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Please see below a summary note prepared by the EU Commission, DG Trade, on several access to medicines issue (this document replaces a meeting which had to be canceled last week).
Interesting to see how the Commission evaluates the results of its regulation on anti-trade diversion... which does not correspond to the conclusions MSF has drawn from the last "untangling the web of price reduction" released this week.
The note also explains the state of play of the EU proposal for implementing compulsory licenses for export, explaining how this new "threat" will lead to spontaneous price reductions from the industry (although the European generic industry has publicly stated that the mechanism was too complicated for them to use see: http://www.egagenerics.com/doc/ega_compulsory-licensing_2005-03.pdf)
It ends with a summary on the state of play of the discussions on the TRIPS amendment.
Seco
NEWSLETTER
Access to medicines
1. Report on the Application of Regulation 953/2003
The first annual report under Council Regulation (EC) No 953/2003 of 26 May 2003 to avoid trade diversion into the European Union of certain key medicines was transmitted to the Council on 23 June 2005, under the reference SEC (2005) 896.
The first Annual Report (2003-2004) on Council Regulation (EC) No. 953/2003 is now publicly available on the Access to Medicines website:
http://trade-info.cec.eu.int/cgi-bin/antitradediversion/index.pl
The report contains detailed information on volumes and destination countries of tiered priced medicines covered by the Regulation since the approval of applications in the period between mid-April and December 2004. The impact of the Regulation, though small in comparison with the number of people suffering from the three targeted diseases, should be seen as a worthwhile contribution in the wider context of the Commission policy on tiered pricing with the objective to supply medicines on a cheap but sustainable basis for the developing countries.
2. EC Regulation on Compulsory Licenses
The proposed Regulation on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems is intended to transpose the WTO Decision of 31 August 2003 foreseeing a temporary waiver of obligations under TRIPs into EU Community Law. This waiver enables WTO members to grant compulsory licenses on pharmaceutical products for the purpose of exporting them to countries without production facilities.
The EU is obliged to remain faithful to the Decision adopted by the WTO General Council. However, in the course of the ongoing legislative procedure the Commission proposal will foreseeably be amended in several ways, including the introduction of a fast track procedure (no prior negotiation with the patent holder) in emergency cases, and the extension of the scope of beneficiary countries to least developed countries that are not members of WTO. The adoption of the Regulation by the European Parliament and the Council is expected to take place in autumn 2005.
The very fact that compulsory licences are possible will completely change the negotiating position of patent holders and potential purchasers. If patent-holders refuse to sell the drugs in question at a reasonable price, they will risk seeing their generic competitors doing the business in their place. In the circumstances, it is highly likely that they will prefer to sell the drugs themselves, albeit at a lower price. Thus, while it is not certain that a great number of compulsory licenses will have to be granted, a fall in the price of drugs (and, consequently, easier access to these drugs) can be expected.
3. Adoption of compulsory licensing legislations by other countries
The recent introduction of product patenting rules into the Indian Patents Act has caused some concern with regard to whether India will be able to continue supplying cheap generic drugs to developing countries. In this context, it must be noted that, by introducing product patents for pharmaceuticals, India has fulfilled an obligation under the TRIPs Agreement. Moreover, the (new) Section 92A of the Patents Act includes a far-reaching provision on compulsory licenses on pharmaceutical products. Therefore, there is no reason to expect India ceasing to export affordable generic medicines to countries in need, since Indian companies have pre-existing infrastructure to produce and export generics, as well as expertise in serving the markets of developing countries in need.
Other countries having adopted rules enabling them to grant compulsory licenses for the purport of exporting medicines include Norway, Canada, the Netherlands and Switzerland.
4. Amendment of the TRIPs Agreement
Negotiations on transposing the waiver Decision of 30 August 2003 into an amendment to the TRIPs Agreement are still going on in the WTO/TRIPs Council. Membersb positions remain far apart on how to proceed. On the one hand, the EC like many other WTO Members consider that the amendment process should remain a purely technical exercise without any reopening of the discussion on substantive issues. The waiver Decision is indeed a compromise that was difficult to reach. Therefore, any attempt to renegotiate this compromise would jeopardize the amendment process.
The US, while sharing the EC view on the technical character of the amendment process, wants an explicit reference to the Statement, which was made by the WTO General Council Chairman at the time of the adoption of the waiver Decision, into the amendment.
Until now only the African Group has tabled a proposal for an amendment. The African proposal adopts a bpick-and-chooseb approach. Several provisions of the WTO Decision have been eliminated, while others have been redrafted. They consider that a number of the Decisionbs provisions would be either redundant in the context of an amendment or would be otherwise served by existing TRIPs provisions on compulsory licences and enforcement.
The EC does not share the African approach and intends to submit its own proposal to the TRIPs Council. A draft proposal is still under discussion with the EU Member States. The objective of this proposal would be to put on paper the EC views on how to technically transpose the WTO Decision into an amendment to the TRIPs Agreement.
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Seco Gerard
MSF Access Campaign EU Liaison Officer
C/O MSF Belgium
Rue DuprC) 94
B-1090 Brussels
Direct number: +32 2 474 75 09
Fax number: +32 2 474 75 75
Mobile number: +32 479 514 900