Chairman's text brings new difficulties to WTO 'Paragraph 6'

It is false to assert that protecting public health and pursuing industrial or commercial objectives are contradictory objectives. The Chairman's statement puts further demands on packaging and labelling that are likely to increase the cost rather than reduce it. Members are encouraged to "seek to resolve issues arising from the use and implementation of the Decision expeditiously and amicably". However it is entirely unclear what these 'issues' could be. While the objective of the Chairman's text is to clarify how the decision will be interpreted and implemented, this text does the reverse by introducing cloudy language that makes it more risky to use the system. Furthermore, it introduces cumbersome procedures in addition to those already included in the Motta text, irrelevant advice and inappropriate references to specific drug companies and their products.
Read the Draft Chairman's statement in PDF format here. MSF is deeply concerned about the text and the intention of the August 21 draft of the TRIPS Council Chairman's statement that may accompany the "Motta text" when it is submitted for consideration by the WTO. The text of Mr Vanu Mopala Menon, Singapore's WTO Ambassador and Chairman of the TRIPS Council, is a sad reflection of how removed the 'Paragraph 6' negotiations have become from their original goal of getting medicines to the people who need them. Rather than allowing the poorest countries to make effective use of compulsory licensing, this text seeks to throw up as many obstacles and discouragements as possible, and opens the system up to constant political intimidation from powerful Members. The Chairman's statement adds an extra layer of requirements and conditions for the production and export of generic versions of needed medicines. The Chairman's statement introduces new obligations for Members that are not required in "Motta" and are contrary to the Doha Declaration on TRIPS and Public Health. A few examples include: 1) New statement of purpose: The Chairman's statement introduces an extra statement of purpose when it says "Members recognise that the system established should be used in good faith to protect public health and, without prejudice to paragraph 6 of the Decision, not be an instrument to pursue industrial or commercial objectives." On the surface, this may seem reasonable because the protection of public health should indeed be the prime objective of these negotiations. However, it is false to assert that protecting public health and pursuing industrial or commercial objectives are contradictory objectives. MSF's experience in the field demonstrates that the most affordable medicines are those that are produced by multiple firms. Generally, companies in developing countries produce the most affordable medicines. Production and trade in medicines is largely in the hands of commercial companies and are clearly industrial activities. This Chairman's note seems mainly targeted at halting affordable generic production rather than encouraging it. Medicines that are offered outside the usual commercial system, such as price discounts for developing countries, rarely offer a better deal than a competitive market with multiple producers. For example, the lowest discounted price of Boehringer Ingelheim's nevirapine, a drug used in many first-line ARV therapies, is $438 per person/year (ppy), while a generic version (whose quality has been pre-qualified by WHO) costs only $166 ppy—or, 38% of the discounted originator price. This price pattern holds for many other drugs as well. 2) Extra anti-diversion measures: The Chairman's statement puts further demands on packaging and labelling that are likely to increase the cost rather than reduce it. It is well known that poor populations are extremely sensitive to price. The Motta text in 2bii demands that products produced under the system shall be clearly identified, but only "provided that such distinction is feasible and does not have a significant impact on price ...". The Chairman's text would override this earlier concern about feasibility and effect on price, stating that Members now "understand that in general special packaging and/or special colouring or shaping should not have a significant impact on the price of pharmaceuticals." It is not clear why Members would change their minds on this issue. Also it is unclear why and how this would apply to active ingredients, as the Chairman's text requires. The extra requirements on diversion seem to be aimed at further discouraging countries and producers from using the system. Diversion of generic medicines is a matter of intellectual property (IP) law and drug regulation. For example generic versions of ARV's are not available on the market in Europe and the US because these products are under patent and the system is sufficiently effective in preventing importation of generic versions of these drugs. The quoted so-called best practices by Big Pharma refers to products that are differentially priced by the same company or products used in donation programmes and help to counter the parallel re-importation of these products into the high price markets. This is an entirely different situation from what should be the every day business of producing and exporting of generic medicines under paragraph 6, and it seems strange that this text puts so much emphasis on this. (It should be noted that referring to medicines by their brand names only without mention of international non-proprietary name (INN) is considered bad practice). 3) New powers to TRIPS Council? The Chairman's statement seems to introduce an extended role for the TRIPS Council and the WTO in policing the system. Members are encouraged to "seek to resolve issues arising from the use and implementation of the Decision expeditiously and amicably". However it is entirely unclear what these 'issues' could be. The text seems to introduce a new function for the TRIPS Council when it says: "Any Member may bring any matter related to the interpretation or implementation of the Decision, including issues related to diversion, to the TRIPS Council for expeditious review, with a view to taking appropriate action." [emphasis added]. It is unclear what kind of action the TRIPS Council may take under this or what the basis for the Council's action would be. Under 'Motta' the TRIPS Council's role did not encompass any 'action'. In conclusion, while the objective of the Chairman's text is to clarify how the decision will be interpreted and implemented, this text does the reverse by introducing cloudy language that makes it more risky to use the system. Furthermore, it introduces cumbersome procedures in addition to those already included in the Motta text, irrelevant advice and inappropriate references to specific drug companies and their products. The sum total of the Chairman's Statement and the Motta text is a system in which countries must jump through a multi-layered tangle of hoops to get access to a few medicines. Any one of these hoops can easily be closed off by political pressure or economic infeasibility, rendering the system extremely vulnerable. We call upon the Members of the WTO to reject this text. Sometimes it is better to agree to disagree than to adopt solutions that will undermine the very objectives of the talks: to protect public health and promote access to medicines for all.