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

Mr. Martin Glass (Hong Kong, China)
United States of America
F.5 Any alternatives to the use of the Paragraph 6 System to achieve the objective of access to medicines, procurement policies, and other related aspects affecting access to medicines
257. The representative of the United States said that the TRIPS Agreement provided an important balance between providing incentives to research and develop new medicines and promoting access to existing patented medicines. The Doha Declaration had stated that the TRIPS Agreement "does not and should not prevent members from taking measures to protect public health". His delegation was a global leader on improving public health. US funding for global health had increased significantly over time, particularly in the last decade. Funding had more than doubled between 2004 and 2008, reaching USD 9.6 billion in 2008. In 2009, the United States had been the largest donor in the world for the global response to HIV/AIDS, accounting for more than half of disbursements by governments. As part of the US Government's global health programme, his delegation was committed to promoting equitable access to safe and effective medicines of assured quality around the world. It was also fully committed to helping countries that were experiencing public health crises to find real and comprehensive solutions. 258. He said that his delegation had strongly supported the General Council Decision of August 2003 to implement the Doha Declaration so that drugs could be exported under a compulsory licence under the terms set out in the Decision and the accompanying Chairman's Statement. It had also lent strong support to the Protocol Amending the TRIPS Agreement in 2005 to make the System a permanent part of the Agreement and to appropriately preserve reference to the Chairman's Statement. He recalled that the System had been the result of robust discussions and had attracted the consensus of the Members; other prior proposals had been left behind. His delegation had been the first Member to notify its acceptance of the amendment. The System was intended to be only one tool to assist in promoting access to medicines and provided an important failsafe in Members work to improve access to medicines. In the past, some delegations had shared their view that the System had been used sub-optimally and that an analysis of its functioning was needed. As his delegation had affirmed at previous meetings, the Council's annual review was the forum at which Members had intended reviews of the operation of the System to be conducted. It was also the place where Members, who were the users of this intergovernmental system, should share their experiences regarding any concerns. 259. He noted that in the past some delegations had attached importance to the fact that the System had been used only once. Counting the frequency of use was, however, not the right metric to measure the effectiveness of the System. Instead, the results had to be evaluated. Members needed to look at the extent to which medicines were reaching affected populations. With respect to that question, the number of times that Members had relied on the System as a safety valve mechanism did not provide the right focus. Instead, the System should be viewed in its proper, larger prism. This principle had been reflected in paragraph 2 of the Doha Declaration. He noted that the majority of the drugs on the WHO's Model List of Essential Medicines were off-patent. Additionally, it was also important to recall that the System's development had been one element of a larger international exchange of ideas that WTO Member governments, the donor community, companies, and other stakeholders had had, and continued to have, in order to improve access to medicines. That work had led to real and measurable progress over the past decade in improving access to medicines. Further, it had led to partnerships between governments, between governments and stakeholders, and between stakeholders themselves. 260. In his delegation's discussions with stakeholders across the spectrum, he had consistently heard that access to medicines was being improved through numerous means. Those means included developed country policies and programmes that placed greater emphasis on building sustainable capacity in the public sectors of developed country partners and at their national and community levels to provide basic services over the long term. They also included efforts to expand research and development of innovative drugs and production capacity for both innovator and generic drugs in developing countries. Further, those means included donations of health products by Members, the private sector, and international bodies, as well as tiered pricing, bulk purchase mechanisms, innovative licensing models and other measures by innovative and generic companies and multilateral bodies. The United States, through the National Institutes of Health (NIH), had been the first patent holder to share its patents with the newly established Medicines Patent Pool Foundation. The initial contribution by the NIH and its co-patent owner, the University of Illinois, had embodied these commitments and had taken an important step toward making affordable and appropriate HIV medicines available to patients around the world. It had built on the US President's previous commitment to support humanitarian licensing policies to ensure that medications developed with taxpayer dollars were available off-patent in developing countries. 261. With respect to measures undertaken by innovative and generic companies to meet the needs of LDCs and others, he noted that in many cases, innovator companies simply did not apply for patent protection in many developing countries. There had been widespread tiered pricing of pharmaceutical products tied to individual and sub-regional developing country markets. Tiered pricing was linking the price of a pharmaceutical product in a market to what the consumer or purchasing government could afford to pay. While tiered pricing was not a new strategy, its frequency of use had dramatically increased in the past decade. For example, Bristol Myers Squibb, partnering with many Health Ministries, had announced a number of years ago that it would make all of its HIV medicines available at no-profit prices in sub-Saharan Africa. In 2005, the company had announced that paediatric formulations would be priced below cost, in order to further reduce barriers to provide access to this treatment. He understood that other companies, such as GlaxoSmithKline, had offered certain antiretroviral drugs at not-for-profit prices in 64 different countries. A number of other companies were reportedly working together to provide a "single tablet a day" product at significantly reduced prices. These examples made it clear that private actors were improving access to medicines in a manner that simply had not been present five to seven years ago. 262. Many patent owners also reported that they had partnerships with generic manufacturers to make their products more generally available. They relied upon these generic manufacturers, often in developing countries, to scale up their manufacturing. The partnership between Gilead, an innovative pharmaceutical company, and Indian and South African generic manufacturers represented one example in this regard. It had increased the number of people receiving various treatments from 100 at the time of the Doha Declaration in 2003, to 700,000 in 2010. Gilead had entered into licensing agreements with those pharmaceutical companies to transfer its patented technology for the formulation of the medicine. These treatments addressed HIV infection and chronic Hepatitis B in adults. With respect to its Indian partners, Gilead had entered into licensing agreements to produce and distribute a generic version of the drug to 95 low-income countries much earlier than otherwise possible, due to India's production capacity and capable generics industry. The licensing revenue from these agreements was also reinvested to fund medical education, safety reporting, and product registration/marketing approval in destination markets. He noted that a number of companies around the world had granted licences to generic pharmaceutical companies to make generic versions of their drugs. He understood that licensing contracts were being explored by pharmaceutical companies in Bangladesh, Ethiopia, Kenya, Tanzania and Zimbabwe, as well as other countries. 263. Another example of a partnership between innovators and generics was the global Meningitis Vaccine Project (MVP). The MVP had been established in 2001, using technology licensed by the NIH. In 2001 and 2002, the MVP had approached various vaccine manufactures, seeking a manufacturer who could agree to manufacture the vaccine for 50 cents a dose, the price that NIH had been told by countries in Sub-Saharan Africa was necessary for the vaccine to be affordable in their marketplaces. The Serum Institute of India had accepted the challenge, and, after about eight years of work, had begun to ship the vaccine to Mali, Burkina Faso, and neighbouring Niger in September 2010. This eight year lag did reveal a larger point, i.e. that the procurement of medicines was a long process. Any measure of length of obtaining a licence under the System should take this into account. The results of this collaboration spoke for themselves. With respect to the MVP project, over a recent 17-day period, over 1 million people had been vaccinated. The target was to distribute 40 million doses. The Gilead and MVP approaches were just two examples of partnership trends that were increasing and delivering real results. These approaches had not existed ten or 15 years ago. There were many such cutting-edge partnerships that were promoting access to medicines. Other similar partnership trends that had been reported included an increase in the number of research collaborations targeting areas of need and increased voluntary sharing of intellectual property, such as "compound libraries" for research purposes. One company had launched a knowledge pool, now run independently by a third party, that had placed approximately 80 patent families in a pool to help others develop new medicines for neglected diseases. 264. In addition to collaboration with innovator companies, the generic drug industries had also had a significant role to play in improving access. For example, generic companies were engaging in more research activities for adapting existing products to the needs of developing countries as well as assisting in capacity advancement in poor countries. Many of those partnerships also provided jobs, access to doctors and nurses, and training for medical staff, schools and hospitals. He said that the ability to patent an invention was critical to ensure that there was an incentive for developing the medicine and that its benefits could be shared widely. The development of new, life-saving drugs was a risky and expensive process, and it was necessary to provide incentives for the private sector to undertake this effort. Intellectual property rights were essential to provide this incentive so that new drugs could be brought to the market. Moreover, patent systems could provide important incentives to reward innovators who had identified ways to adapt medicines to many different challenging circumstances, such as a lack of refrigeration or a need for more patient-friendly ways of administering a drug that might be particularly relevant in developing country markets. Many actors were working to promote access to medicines. The intellectual property system played a critical role in assisting this effort. 265. Time had shown that intellectual property rights were not often the determining factor in the larger issue of access to medicines, as had sometimes been asserted. Many complex factors hampered access to medicines in developing countries, including sub-optimal procurement systems and poor distribution networks for medicines, caused by lack of basic infrastructure, hospitals, clinics and healthcare professionals, among others. The goal of equitable access to medicines was not achievable or sustainable without fostering improvements to the health systems themselves to ensure that patients could actually receive the drugs. Additionally, systemic problems, taxes and tariffs on imported medicines, and a lack of cold-chain storage, were often overlooked problems in many multilateral discussions. 266. With respect to problems that inhibited access to medicines, he noted that in some cases taxes or tariffs were levied on products being supplied at cost, or on donated products, the cost of which was passed directly to patients. Moreover, health care was often delivered far from the community being served. Weak drug procurement and delivery systems were another barrier to access to medicines. Lack of transportation and infrastructure also made it difficult to distribute pharmaceutical products and for a patient to see a doctor. Backlogs, regulatory redundancy, as well as other non-tariff barriers also hindered the distribution of both generic and innovative drugs where they were most needed. Finally, if the healthcare system was flooded with counterfeit products, true access was not achieved. Because of weak regulatory regimes and global criminal networks, counterfeit and substandard medicines harmed or killed sick people across the globe, with the developing world being disproportionately affected. The WHO had estimated that "in over 50 per cent of cases, medicines purchased over the Internet from illegal websites that conceal their physical address have been found to be counterfeit". These were all problems that could be solved. Many of the issues would require action by both developed and developing countries. It was clear that, without accounting for the full range of problems that existed, Members could not make the improvements that would foster improved access. 267. With respect to some of the solutions with which the United States was involved, he said that on 22 September 2010, President Obama had announced a new US global development policy, the first ever for a US Administration. Through the policy, President Obama had made it clear that sustainable development was a long-term proposition, and progress depended on the choices of political leaders and the quality of institutions in developing countries. Where leaders governed responsibly, set in place good policies, and made investments conducive to development, sustainable outcomes could be achieved. Where those conditions were absent, it was difficult to engineer sustained progress, no matter how good the intentions or the extent of engagement. The policy had placed greater emphasis on building sustainable capacity in the public sectors of US partners and at their national and community levels to provide basic services over the long term. The United States would continue to provide medicine, emergency food aid, humanitarian relief and other assistance where it was urgently needed. But the United States would also strive to help increase the capacity of its partners to meet those needs by investing in systemic solutions for issues such as service delivery and public administration. President Obama's six-year, USD 63 billion Global Health Initiative (GHI), had focused on sustainable service delivery where the needs were greatest and the conditions were right to build effective health service delivery systems. As to shortages of skilled health care professionals, the US Government, as well as many private companies, had undertaken significant efforts to improve healthcare systems in developing countries. In the President's Emergency Plan for AIDS Relief (PEPFAR) and the President's Malaria Initiative (PMI), the United States was training a significant number of health workers in support of sustainable health systems. The United States was also a leader in the implementation of task-shifting initiatives in Africa. The PEPFAR had promoted access to medicines and other products through many means, including by improving supply chain management. This approach was saving lives; through PEPFAR, 2.5 million people were being supported for life-saving antiretroviral treatment. 268. The PMI was working to improve access to malaria medicines through their procurement and distribution in the 15 PMI focus countries (Angola, Tanzania, Uganda, Malawi, Mozambique, Rwanda, Senegal, Benin, Ethiopia, Ghana, Kenya, Liberia, Madagascar, Mali and Zambia), distributing over 80 million treatments. With respect to government tariffs, as part of the WTO NAMA negotiations, Switzerland, Singapore, the United States and Chinese Taipei had proposed an Enhanced Healthcare Initiative for Members to jointly reduce or eliminate tariffs on medicines and key medical equipment and supplies. He hoped that other Members would join in this effort, as it would result in lower medicine prices. Similarly, the use of transparent, competitive and non-discriminatory procurement procedures and practices would provide governments with more choices from a broader array of suppliers that could mean lower prices and more effective use of limited financial resources. Access to medicines was a complex issue that required a multifaceted, and often multi-sectoral approach, that addressed all aspects in a meaningful way. The System must be located in this larger prism. The United States' experiences on approaches that were producing results were an illustration that Members should not focus only on reliance on the System as a proper or meaningful gauge of its operation.