23 Compulsory licensing of patents for
pharmaceuticals
| (27472)
8932/06
COM(06)175
| Draft for a Council Decision accepting, on behalf of the European Community, the Protocol amending the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), done at Geneva on 6 December 2005
|
| Legal base | Article 133(5), 300(2) and(3) EC; assent; QMV
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| Document originated | 27 April 2006
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| Deposited in Parliament | 8 May 2006
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| Department | Trade and Industry
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| Basis of consideration | EM of 22 May 2006
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| Previous Committee Report | None; but see (26116) HC 38-iii (2004-05), para 27 (12 January 2005)
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| To be discussed in Council | No date set
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared
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Background
23.1 The TRIPS Agreement (the Agreement on trade-related Aspects
of Intellectual Property Rights) requires members of the World
Trade Organisation (WTO) to provide patent protection for technology-based
products including pharmaceuticals. The agreement provides for
minimum standards for intellectual property rights, in particular
by restricting the circumstances in which compulsory licences
may be granted (that is licences granted permitting the use of
the patented invention irrespective of the consent of the patent
owner). It provides that products which are manufactured under
a compulsory licence must be intended predominantly for the domestic
market. However, many developing countries lack the manufacturing
capacity to produce pharmaceutical products, with the result that
little practical advantage is gained from the grant of compulsory
licences within the national territory, since such products have
to manufactured elsewhere for import into such countries.
23.2 The WTO Decision of 30 August 2003 on the implementation
of the 2001 Doha Declaration sought to overcome this difficulty
by allowing WTO members to grant compulsory licences for the production
and sale of pharmaceutical products which are intended for export
to third countries with insufficient or no domestic manufacturing
capacity. The WTO Decision was a temporary "waiver"
within the meaning of the Marrakech Agreement establishing the
World Trade Organization which would eventually be replaced by
an amendment to the TRIPS Agreement.
23.3 The previous Committee considered a draft Regulation
to implement the WTO Decision at Community level on 12 January
2005. It noted that EC-based manufacturers would be permitted
to export products made under compulsory licence to developing
countries which had insufficient domestic production capacity,
but that such products were not be re-imported into the Community.
The Committee considered that the WTO Decision represented
a compromise between the competing interests of the pharmaceutical
industry and the need of developing countries for affordable medicines
to address major public health problems, such as those of AIDS
in sub-Saharan Africa, and cleared the draft Council Regulation
from scrutiny. The Council Regulation was adopted on 27 April
2006, and will come into force following its publication in the
Official Journal.
The proposed Council Decision
23.4 In December 2005 the WTO agreed the terms of
a Protocol the effect of which is to convert the temporary WTO
Decision of 30 August 2003 into an indefinite amendment of the
TRIPS agreement. The Protocol amends Article 31 of the TRIPS agreement
so as to reflect the earlier WTO Decision. The draft Council Decision
accepts the Protocol to the TRIPS agreement on behalf of the Community.
The Government's view
23.5 In his Explanatory Memorandum of 22 May 2006
the Parliamentary Under-Secretary of State for Science and Innovation
at the Department of Trade and Industry (Lord Sainsbury of Turville)
explains that the Government is sympathetic to the needs of developing
countries to secure access to essential medicines and therefore
formally recognises the amendment to the TRIPS agreement in accordance
with the WTO Decision of August 2003. The Minister adds that this
will allow EU and UK generic manufacturers to be able to export
generic pharmaceuticals to an appropriate developing country.
The Minister further explains that the Government recognises and
has taken into consideration the concerns of the research based
pharmaceutical industry that their intellectual property rights
should not be undermined. The Minister notes that the purpose
of the WTO measure would be defeated if pharmaceutical products
supplied under it were to be diverted from the markets for which
they were intended, and states that the Government supports the
aim of the anti-diversion measures contained in the amendment
to the TRIPS agreement.
Conclusion
23.6 We note that the proposal gives indefinite
effect to the compromise reached in the WTO in August 2003 between
the competing interests of the pharmaceutical industry in the
protection of their intellectual property rights on the one hand,
and the needs of developing countries for essential medicines
on the other. We also note that the present amendment to the TRIPS
agreement is to the same effect as the 2003 Decision, and that
the proposed Council Decision accepts the amendment on behalf
of the Community.
23.7 We are grateful to the Minister for the explanations
he has provided, and we are content to clear the document.
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