Minutes - TRIPS Council - View details of the intervention/statement

Ambassador Eduardo Pérez Motta (Mexico)
C.i Scope and coverage
18. The representative of Argentina said that the listing of certain diseases in paragraph 1 of the Declaration should not be taken to be an exhaustive list of public health problems sought to be solved by the Declaration. He quoted paragraph 5(c) of the Declaration that stated that public health crises including those of tuberculosis, HIV/AIDS and malaria and other epidemics could represent a national emergency or other circumstances of extreme urgency and said that this should be taken to be a list of examples that did not exclude other circumstances of public health crises not specifically mentioned. He also drew attention to paragraph 4 of the Declaration which reinforced the right of Members to promote public health and gain access to medicines for all. In this context, Argentina believed that the Declaration was applicable to any national emergency or other situations of extreme urgency and that every Member should be able to decide which situation merited classification as one of extreme urgency. 19. Turning to the document IP/C/W/348 prepared by the Secretariat on the existence or non- existence of patent protection in Members, he said that, although this was a valuable contribution to the debate, it was based only on published sources, referred to only a few diseases and used outdated information. Specifically, the document stated that there was no patent granted, or application pending in Argentina with respect to pharmaceutical products relevant to the diseases enumerated in the Declaration. A report received from Argentina's National Institute for Industrial Property, however, stated that there were, in fact, a significant number of patents in the country related to these diseases, namely, 12 related to HIV/AIDS, three related to malaria and 76 other applications pending. This information clearly showed that the entry of such patented products into the public domain would not take place for some time to come. An important factor to be considered in the context of this document was that the date taken as a basis for compiling the information predated the enforcement of the TRIPS Agreement before which many least-developed countries and some developing countries did not allow patents in the pharmaceutical sector. 20. With respect to the evaluation of insufficient manufacturing capacity, he said that Argentina was against the establishment of new categories of countries in the WTO as any such categorization would be detrimental to the interests of developing countries. Without prejudice to the position of developing countries that would like to decide insufficient manufacturing capacities on their own, he thought that it would be desirable to have certain objective criteria as guidelines for this examination. He, however, took note of document IP/C/W/345 which outlined the difficulty in reaching a consensus on such objective criteria. There were methodological inconsistencies in the information in that document that prevented a comparison of the relative merits or demerits of the criteria suggested. For example, the listing of production values of the pharmaceutical industry in various countries was measured over different periods of time. Even where the period of analysis was the same, the evaluation criteria differed according to the variable under consideration. The same sort of problems were seen in the next three lists as well. He stressed that in the establishment of objective criteria the Council should take note of the dynamic development of the pharmaceutical industry. The data on the world pharmaceutical industry used in the document were based on a UNIDO report of 1992 and appeared to be inadequate to meet the needs of decision-making under paragraph 6 because the industry had undergone substantive qualitative and quantitative changes since that date. Moreover, the period referred to in the document, i.e. 1992–1994, was a period in which many developing countries did not allow either product or process patents for pharmaceuticals. Therefore, any conclusion based on empirical data should refer to data collected after the entry into force of the TRIPS Agreement and any objective criteria would have to take two points into consideration: firstly, the distinction between active ingredients and final products and secondly, the distinction between general manufacturing capacity and specific capacity. Paragraph 6 referred to Members with insufficient or no manufacturing capacity and, in the absence of a distinction being made in the Declaration as to active ingredients and final products, this should be taken to refer to insufficient or non-existent manufacturing capacity for both elements. In other words, only if a country had the capacity to manufacture both elements should it be excluded from the solution since a country that could not produce the active ingredient would still be in a position of strategic dependence. The production of active ingredient should, therefore, be taken as a central link. The information on foreign trade in document IP/C/W/345 did not give any idea of the degree of dependency of each country on the import of the active ingredients as it referred only to product codes 541 and 542 which related to final pharmaceutical products. It was crucial to also collect and analyse data on products relevant to the sector which were included in the Standard International Trade Classification 51 as the majority of the active ingredients for the pharmaceutical industry fell within this group. Any conclusion reached that did not take into account the trade in active ingredients would be based only on partial information. He said that a correct analysis would reveal the dependence of some developing countries, where the numbers appeared to show a high capacity for independent production, on outside trade in active ingredients. In the case of an epidemic such least-developed countries and even developing countries could face a crisis in production of medicines which might not appear to be the case when looking merely at partial industry information. In addition, with respect to general manufacturing capacity and its interpretation to actualize promotion of public health and access to medicines, it had to be recognized that a country might have technical capacity to produce the pharmaceuticals but it might not be economically viable to do so. Similarly, another country might possess significant general manufacturing capacity but not have the equipment or technical capacity or chemical input for the product or sector required. A solution based on static categories of countries would not be appropriate and the solution agreed upon must be one that could be used at least for all least-developed countries and developing countries. Moreover, document IP/C/W/345 assessed the capacity for innovation by unrealistically and inappropriately saying that a country had innovative capacity simply because between 1961 and 1990 it discovered and marketed, within its country, at least one new chemical entity or product. Any analysis that did not consider the high costs of R&D would be faulty. The bulk of the expenditure on R&D, i.e 85 per cent, was spent in developed countries and this correlated with a concentration there of innovation in chemical products. The Secretariat document needed to be reviewed and revised in order to form an appropriate basis for this debate.