Neither Expeditious, Nor a Solution: The WTO August 30th Decision is Unworkable

What is the August 30th Decision?

The minimum standards for intellectual property protection, including pharmaceutical patents, are set out in the 1995 World Trade Organization (WTO)’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The TRIPS Agreement does not allow for differentiation between products that are merely consumer goods and those that are life-saving medicines. Its aim is to harmonise intellectual property standards globally. This has led to patent practices that maintain drugs at artificially high prices even in the poorest countries.

In November 2001, members of the WTO sought to restore a balance by adopting the Doha Declaration on TRIPS and Public Health. Paragraph 4 of the Doha Declaration states that the TRIPS Agreement, “can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all. In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.”

These flexibilities include, for example, compulsory licensing, whereby a government allows the production, import and sale of a drug still under patent. This can be done without the permission of the patent holder, who must nevertheless be paid royalties.

But Article 31 of the TRIPS Agreement limits the use of compulsory licenses “predominantly for the domestic market” and puts restrictions on the quantities of drugs that can be exported. This poses huge problems for countries that have little or no drug manufacturing capacity.  Indeed in Paragraph 6, the Doha Declaration recognises that such countries “could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem.”

Almost two years later, on August 30th 2003, the WTO adopted a temporary decision in an attempt to address this issue. The proposed solution allows for the exportation of a drug under compulsory license and waives the requirement that production has to be predominantly for the domestic market. The August 30th Decision establishes the conditions under which a compulsory license can be granted for export. But MSF’s experience trying to buy drugs under the new rules shows that they are prohibitively complex.