© GlaxoSmithKline

Key Messages

• IFPMA member companies are committed to improving access to medicines for those who cannot afford them.
• While compulsory licenses are possible under TRIPS, they are only an option; they are certainly not the solution to access problems.

Background

IFPMA member companies are committed to improving access to medicines for those who cannot afford them, particularly in Least Developed Countries (LDCs) and low-income countries (LICs). Throughout the years, this commitment was been materialized in different access initiatives, most of which do not depend on intellectual property rights. For example, preferential pricing and capacity building are relevant whether or not there are patents on pharmaceutical products. This is often the case in the LDCs and LICs. Where patents do exist, many companies have gone beyond preferential pricing initiatives to implement access models allowing generic companies to produce the patented medicine. Examples of these IP access models include voluntary licensing and non-assert policies.

The World Trade Organization (WTO) Doha Ministerial Declaration in 2001 on the TRIPS Agreement and Public Health  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. To this end, the declaration reaffirmed the right of countries to make use of “TRIPS Flexibilities”, like compulsory licenses (CLs). Some governments look to CLs as a “solution” to their access problems. However, while compulsory licenses are possible under TRIPS, they are only an option. They are certainly not the solution to access problems. Rather, frequent use of them could discourage introduction of new medicines where they could be used, and frequent use of CLs weakens the IP framework and thereby undermines the system that underpins the ability of the private sector to undertake essential R&D.

Another kind of “TRIPS Flexibility” was created by the WTO Decision of 30 August 2003 (the "Paragraph 6 Mechanism"), which became a permanent amendment in 2005. It allowed WTO Members to grant compulsory licenses for the production and sale of patented pharmaceutical products intended for export to developing countries. Recently, some critics have claimed that the system is overly bureaucratic and does not work. They base their claim on a purchase by Rwanda of antiretrovirals produced by the Apotex in 2007 under the Paragraph 6 mechanism. In fact, it took only two months to complete all necessary legal steps to permit Apotex to license a product for export.

Actual use of compulsory licensing provisions should be seen as a final option given that other approaches are generally found to be more effective in practice. According to the WTO Director-General Pascal Lamy “The objective was never to issue lots of compulsory licenses as an end in itself. The objective was and remains cheaper medicines for the poor. The system, therefore, has to be judged in terms of prices and access. A simple headcount of notifications under the paragraph 6 system is a poor indicator of public health outcomes.” The number of patients treated for HIV/AIDS went from 50,000 patients in 2003 to 1.57 million patients in January 2005. That number increased to 4.7 million patients by December 2009