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The WTO Medicines Decision: World Pharmaceutical Trade and the Protection of Public Health

Published online by Cambridge University Press:  27 February 2017

Frederick M. Abbott
Frederick M. Abbott*
Affiliation:
Florida State University College of Law
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Extract

On November 14,2001, the Ministerial Conference of the World Trade Organization, meeting in Doha, Qatar, adopted the Declaration on the TRIPS Agreement and Public Health (Doha Declaration). The declaration affirms that the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights “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,” and it reaffirms that the Agreement “provide[s] flexibility for this purpose.” The Doha Declaration mandated further negotiations on one important subject, providing in its paragraph 6: “We recognize that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector 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 … .“

Type
Research Article
Information
American Journal of International Law , Volume 99 , Issue 2 , April 2005 , pp. 317 - 358
Copyright
Copyright © American Society of International Law 2005

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References

1 Declaration on the TRIPS Agreement and Public Health (Nov. 14, 2001), Doc. WT/MIN(01)/DEC/2 (Nov. 20, 2001) [hereinafter Doha Declaration], The Doha Declaration and many other WTO documents referred to in this article are available at the WTO Web site, <http://www.wto.org>.

2 Doha Declaration, supra note 1, para. 4 (referring to Agreement on Trade–Related Aspects of Intellectual Property Rights, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Apr. 15,1994, in World Trade Organization, The Legal Texts: the Results of the Uruguay Round of Multilateral Trade Negotiations 321 (1999) [hereinafter TRIPS Agreement]). The TRIPS Agreement is applicable to all members of the WTO.

3 Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (Aug. 30, 2003), Doc. WT/L/540 (Sept. 1, 2003) [hereinafter Decision].

4 E.g., Intellectual Property: Decision Removes Final Patent Obstacle to Cheap Drug Imports, WTO Press Release, Press/350 (Aug. 30, 2003) (quoting Director–General Supachai Panitchpakdi).

5 Officially, the World Health Organization (WHO) applauded the Decision, noting that the key to success lay in its implementation. Statement of the World Health Organization on WTO Access to Medicines Decision (Sept. 1, 2003), available at <http://www.who.int>. Privately, some individuals in the Essential Drugs and Medicines Policy (EDM) Division worried about the bureaucratic complications involved in using it. Author’s discussions with Jonathan Quick, director, EDM, and Germán Velásquez, coordinator, Drug Action Programme, EDM, at WTO Ministerial Conference, Cancun (Sept. 2003).

6 Becker, Elizabeth, Cheaper Medicines for the World’s Poor; Trade Rules Altered on Patented Drugs, N.Y. Times, Sept. 2, 2003, at A1 Google Scholar (quoting representative of Médecins sans Frontières); Developing Nations Prepare to Use WTO Pact on Cheap Drugs; Industry Sees Little Impact, 20 Int’l Trade Rep. (BNA) 1434 (Sept. 4, 2002)Google Scholar (quoting Oxfam) [hereinafter BNA].

7 Author’s discussions with Shah, D. G., secretary–general, Indian Pharmaceutical Alliance, at WTO Ministerial Conference, Cancún (Sept. 2003)Google Scholar.

8 The Pharma companies are typically the first to obtain marketing approval and are considered the “originators” of new drugs. The U.S. Pharma lobbying group (the Pharmaceutical Research and Manufacturers of America) uses the acronym “PhRMA.” The International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) is a lobbying group for “international” Pharma. For initial favorable responses from IFPMA and PhRMA representatives, see BNA, supra note 6. For the companies’ lobbying activity, see text at note 272 infra and paper of Rx&D infra note 106.

9 Becker, supra note 6 (quoting head of South African delegation to the WTO, Faizel Ismail); BNA, supra note 6 (quoting Kenyan ambassador to the WTO, Amina Chawahir Mohamed).

10 See WTO General Council, Minutes of Meeting on 25, 26 and 30 Aug. 2003, Doc. WT/GC/M/82 (Nov. 17, 2003) [hereinafter General Council Minutes].

11 Compare Office of United States Trade Representative [USTR], Statement of Ambassador Deily, Linnet F., Permanent Representative to the World Trade Organization and Deputy U.S. Trade Representative, Following Agreement in WTO on Access to Medicines (Aug. 30, 2003)Google Scholar, with text at note 248 infra.

12 The complex medicines situation, including the ongoing failure in HIV/AIDS treatment, is considered in Abbott, Frederick M., Managing the Hydra: The Herculean Task of Ensuring Access to Essential Medicines, in International Public: Goods, The Public Domain, and the Transfer of Technology after Trips (Maskus, Keith & Reichman, Jerome H. eds., forthcoming 2005)Google Scholar.

13 For a detailed negotiating history of and commentary on the TRIPS Agreement, see UNCTAD/ICTSD Resource Book on Trips and Development (2005). Article 31 is described and analyzed in id. at 460–95. On the problem posed by Article 31(f) of the TRIPS Agreement, see Abbott, Frederick M., Compulsory Licensing for Public Health N Eeds: The Trips Agenda at the WTO After the Doha Declaration on Public. Health (QUNO Occasional Paper No. 9, Feb. 2002), available at <http://www.geneva.quno.info/index.php?pageid=ind01>Google Scholar. See also Correa, Carlos, Implications of the Doha Declaration on the Trips Agreement and Public Health, Health Economics and Drugs (WHO EDM Series No. 12, 2002), available at <http://www.who.int>Google Scholar.

14 This is expressly confirmed by the Doha Declaration, supra note 1, para. 5(b).

15 TRIPS Agreement, supra note 2, Art. 31(a). This is both a substantive and a procedural rule.

16 Id., Art. 31(b). This condition is not obligatory when licenses are issued to remedy anticompetitive practices. Id., Art. 31(k).

17 Paul Vandoren and Jean Charles Van Eeckhaute of the European Commission suggested the term “fast track” to describe the emergency/public noncommercial use option under Article 31 (b) of the TRIPS Agreement. Vandoren, Paul & Jean Charles, Van Eeckhaute, The WTO Decision on Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: Making It Work, 6 J. World Intell. Prop. L. 779, 783 (2003)Google Scholar (noting that under Article 31 “procedures to grant compulsory licences are not necessarily cumbersome and lengthy” but, rather, “minimal and flexible,” and that the fast–track procedure “covers, in any event, AIDS, tuberculosis and malaria, but also potentially a range of other situations or diseases”).

18 TRIPS Agreement, supra note 2, Art. 31(g).

19 The term “predominantly” may be interpreted in this context as referring to the majority (i.e., more than 50%) of the production. For the definition of “predominantly,” see Abbott, supra note 13, at 26.

20 Article 31(f) of the TRIPS Agreement, supra note 2, also permits at least the reexport of a nonpredominant portion of imports under compulsory licensing.

21 Id., Art. 31(k).

22 The Doha Declaration, supra note 1, states in paragraph 5(b): “Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.” WTO members often control the price of medicines at the national and subnational levels, and compulsory licensing is one of a variety of mechanisms that can be used to control pricing. As William Cornish has observed with respect to the UK Crown Use (i.e., government use licensing) statute:

[T]he wider potential of its powers were dramatically demonstrated in 1965: the House of Lords held that the Ministry of Health might authorise an importer to bring in drugs not made by the patentee for use in the NHS hospital service. In the cases to which it is applicable, the Crown’s ability to override the patentee’s decisions on exploitation may prove a decisive counterweight to full monopoly power.

Cornish, W. R., Intellectual Property 296 (4th ed. 1999)Google Scholar (footnote omitted).

23 See, e.g., WHO, Report by the Secretariat, Manufacturing Antiretrovirals in Developing Countries and Challenges for the Future, UN Doc. EB114/115 (2004); Note by the WTO Secretariat, Available Information on Manufacturing Capacity for Medicines, Doc. IP/C/W/345, Annex 1 (2002); U.S. Int’l Trade Comm’n, Office of Industries, Review of Global Competitiveness in the Pharmaceutical Industry, tbls. A2, A4 (Pub. No. 3172, 1999) (showing sources of U.S. imports).

24 India took advantage of the transition period allowed by Article 65.4 of the TRIPS Agreement, which must be read in conjunction with Article 70.8–.9. Article 65.4 permits developing members that had not previously granted patent protection for pharmaceutical products until January 1, 2005, to initiate such protection, while Article 70.8–.9 provides for the establishment of a patent application “mailbox” and the availability of “exclusive marketing rights” for pharmaceutical (and agricultural chemical) products. Under Article 70.8 a member that did not provide pharmaceutical product (or agricultural chemical product) patent protection was required, commencing on January 1, 1995, to accept such patent applications for filing and store them until protection was provided. At that later point, the applications would be withdrawn from the mailbox and examined, with patentability criteria applied as if the applications were being reviewed when the applications were filed, thereby preserving patentability against acts that might otherwise be disqualifying. If the application were to result in the grant of a patent, the term of the patent would commence on the filing date of the mailbox application. For a detailed treatment of the mailbox system and exclusive marketing rights, see UNCTAD/ICTSD, supra note 13, at 751–82.

25 See, e.g., Fink, Carsten, Patent Protection, Transnational Corporations, and Market Structure: A Simulation Study of the Indian Pharmaceutical Industry, 1 J. Industry, Competition & Trade 101 (2001)CrossRefGoogle Scholar; Lanjouw, Jean O., The Introduction of Pharmaceutical Product Patents in India: “Heartless Exploitation of the Poor and Suffering”? (Nat’l Bureau Econ. Research Working Paper No. 6366, 1998 Google Scholar).

26 Gaz. India Extraordinary pt. II, sec. 1 (2004), Patents (Amendment) Ordinance, 2004, No. 7, New Delhi, 26 Dec. 2004 [hereinafter Indian Ordinance]; see also id., sec. 3(ii), Patents (Amendment) Rules, New Delhi, 28 Dec. 2004. The amendment of the Patents Act in India to fulfill TRIPS obligations with respect to patents on pharmaceutical products has been highly controversial and is worthy of treatment in a separate article. See, e.g., Abbott, Frederick M., in TRIPS and Public Health, 2004 Proc. Indiachem 67 Google Scholar.

On April 5, 2005, the Patents (Amendment) Act was published as law. Gaz. India Extraordinary pt. II, sec. 1 (2005), Patents (Amendment) Act, 2005, No. 15, New Delhi, 5 Apr. 2005 (An Act further to amend the Patents Act, 1970). The 2005 amendments modified the ordinance in quite a few significant ways, including by (1) defining “inventive step” to require technical advance as compared to existing knowledge, or having economic significance; (2) expressly limiting patentability of different forms of the same substance absent a showing of a significant difference in efficacy; (3) maintaining a reasonably strong form of pre–grant opposition; (4) eliminating an unnecessary hurdle to the grant of compulsory licenses under the Decision; (5) clarifying exports permitted under the general compulsory licensing provision (e.g., expressly authorizing export of the nonpredominant part of production), as well as establishing certain presumptive time frames used in that provision; (6) improving a provision intended to permit parallel importation of patented products; and (7) allowing continued production in India of generic versions of medicines already on the market (if now patented by third parties under the mailbox system), with payment of a reasonable royalty—a form of “prior user right” adapted to India’s unique situation. See India Press Information Bureau, Fact Sheet: Important Changes Incorporated in the Patents (Amendments) Bill, 2005, as Compared to the Patents (Amendments) Bill, 2003 (Mar. 23, 2005), available at <http://commerce.nic.in/Mar05_release.htm#h33>.

27 This presumes that patent applications describe inventions that meet the criteria of patentability. Patents are not required to be granted with respect to all applications.

28 “Originator” is a terra of art in the medicines field used to refer to the person that first submits a successful application for regulatory approval of a new medicine. There is not a strict correlation between “patent holder” and “originator” since, in theory, a new medicine need not be patented. However, as a practical matter it is unusual for the patent holder and the originator to be different parties. See World Bank, Battling Hiv/Aids: a Decision Maker’s Guide to the Procurement of Medicines and Reiated Supplies 142 (Tayler, Yolanda ed., 2004)Google Scholar.

29 Or if patents on the medicines are not sought or granted.

30 See note 24 supra.

31 Id.

32 Pursuant to paragraph 7 of the Doha Declaration, supra note 1, the transitional period on pharmaceutical patents and data protection for least–developed WTO members was extended to January 1, 2016. Perhaps more important, least–developed countries may choose not to enforce existing patents or data protection rules until that date. See World Bank, supra note 28, ch. 2 & Annex B.

33 Approximately seven thousand pharmaceutical patent mailbox applications were filed by foreign applicants. See Shah, D. G., The New Indian Patent Law and August 30 Decision: The Response of the Generic Industry, presentation to WHO–CIP1H Commission on Intellectual Property Rights, Innovation and Public Health, Geneva (Mar. 1, 2005)Google Scholar.

34 See Medecins Sans Frontières [MSF], Drug Patents Under the Spotlight: Sharing Practical Knowledge About Pharmaceutical Patents, Annex A (2003), available at <http://www.accessmed–msf.org>. Certain formulations and combinations, including Viramune syrup (Boehringer), Kaletra (Abbott Laboratories), Combivir tablets and Trizivir (Glaxo), show priority dates after January 1, 1995. Combivir, which is a combination of zidovudine (AZT) and lamivudine (3TC), is particularly important as a widely used treatment in Africa and elsewhere. HIV/AIDS treatment experts are quite concerned that patenting of Combivir in India might provide the basis for blocking the production and export of certain generic combination treatments. Trizivir is a combination that adds abacavir to the elements of Combivir. See Médecins Sans Frontières, supra; Interview with Dr. Wilbert Bannenberg, formerly WHO consultant to government of South Africa (Aug. 26, 2004).

35 See, e.g., Médecins Sans Frontières, supra note 34. To illustrate how complex this question is, consider that four patents on Combivir (Glaxo) expire in the United States on September 15, 2005, but an additional eight patents are listed for this medicine, extending to November 17, 2019. 200 Best–Selling Prescription Drugs, Patent Expirations, tbls. 1–3, Med Ad News (May 2004), at <http://www.pharmalive.com>. The first listed patent for Kaletra (Abbott) shows an expiration date of December 13, 2005, but there are a total of twenty–one patents listed for Kaletra in two formulations, and the last patent is shown to expire on November 7, 2017. Id. These data are also reported in the Orange Book of the U.S. Food and Drug Administration (FDA), infra note 47.

36 India’s Patents Act (1970, as amended through 1999) expressly disallowed patents on new uses of known substances and mere combinations of known substances, see sec. 3(d) & (e). The executive ordinance refers to “mere” new uses, which, if adopted into law by Parliament, would introduce a significant element of uncertainty with regard to the disallowance of new use patents. Patents (Amendment) Ordinance, 2004, supra note 26, para. 3.

37 Remarks of Nazmul Hassan, CEO, Bexcimco Chemical Division, Dhaka, Bangladesh, at May 21–23, 2004 QUNO meeting in Jongny–sur–Vevey, Switzerland, infra note 173, regarding information presented by various pharmaceutical industry representatives.

38 The executive in Argentina issued a decree in 1996 providing for the grant of patents with respect to pharmaceutical products commencing in 2000. U.S. Dep’t of State, 2001 Country Reports on Economic; Policy and Trade Practices, Argentina, available at <http://www.state.gov>. China adopted patent protection for pharmaceutical products as a consequence of bilateral intellectual property negotiations with the United States. Protection for pharmaceuticals became available in 1994. Lulin, Gao, China’s Intellectual Property Protection System in Progress, in China in the World Trading System 127, 129 (Abbott, Frederick M. ed., 1998)Google Scholar. Brazil adopted patent protection for pharmaceutical products in 1996. Amendments to Brazil’s patent law became effective on May 15, 1997. Law No. 9.279, 14 May 1996, Regulating Rights and Obligations Regarding Industrial Property, D.O., 15.05.96, notified to WTO Council on Trade–Related Aspects of Intellectual Property Rights, WTO Doc. IP/N/1/BRA/I/1 (Sept. 19, 2000).

39 As discussed infra in text at note 202, countries in Africa receive special treatment under the Decision, which may provide additional impetus for increasing production on the continent. Even prior to the Decision, the South African government was promoting the development of capacity to produce medicines locally.

40 See text at notes 106–10 infra.

41 Note also that HIV/AIDS is an immune deficiency syndrome that may lead to a wide range of opportunistic infections and disease conditions (such as cancer), which may be better treated by patented drugs (such as newer antibiotics). For example, Azithromycin formulation (crystalline dehydrate) is under patent in South Africa until July 2008. Médecins Sans Frontières, supra note 34, Annex A. A solution for HIV/AIDS limited to ARVs would be overly restrictive since it would not address the effects of the condition when treatment is not provided or fails.

42 References to medicines under patent on the essential medicines list are difficult to quantify. To illustrate: recognizing the importance of preventing cardiovascular disease, the authors of the list make reference to the statin class of therapies, noting that these drugs are under patent and expensive. However, the statin class, which includes Pfizer’s Lipitor, was not specifically recommended when this article was written. See WHO, Essential Medicines Library (EMLib), available at <http://mednet3.who.int/eml/>.

43 See Abbott, supra note 12.

44 Note, however, that new drugs for the treatment of malaria are patented, such as artemisone–based drugs for which Bayer holds patent, see News File: Cooperation with WHO Initiative; Bayer Develops New Malaria Medicine; Plans to Help Developing Countries (May 14, 2002), at <http://www.bayer.com>, and that new drugs under development for the treatment of tuberculosis are likely to be patented, see, e.g., TB Alliance, at <http://www.tballiance.org> (reporting on developments in research as of early 2005).

45 On cardiovascular disease, see, for example, Ross, Emma, Causes of Heart Attacks the Same All over Globe, Chi. Sun–Times, Aug. 30, 2004, at 29 Google Scholar, available in Lexis, News Library, Major World Newspapers File, noting that “the globe’s No. 1 killer [is] now taking over the developing world” and that “80 percent of the heart disease in the world is in developing countries.” As for diabetes, it is referred to by the WHO as an “epidemic.” See, e.g., WHO, Combating the Diabetes Epidemic (1999–2000), at <http://www.who.int/diabetes/en/>.

46 See WHO, World Health Report 2002, Annex, tbl. 3; text at note 41 supra.

47 There are a number of important new medicines for the treatment of diseases affecting individuals in developing countries. See, e.g., Med Ad News, supra note 35. For example, Gleevec, an important treatment for leukemia, shows a patent expiration date of March 28, 2013. Bayer’s well–known Cipro antibiotic shows an initial patent expiration date of December 8, 2003, but additional patents listed extend to June 9, 2015. Cardiovascular disease is a major problem in developing countries. The leading cholesterol–lowering drug, Lipitor, is under patent in die United States at least until September 2009.

At present, the U.S. FDA Orange Book, available at <http://www.fda.gov>, in which the pharmaceutical industry lists patents, identifies over four thousand patents. Only a portion of those patents protect medicines that have received regulatory approval, so that further applications can be expected. The operation of the Orange Bookbased system for challenging accelerated new drug applications is described in U.S. Federal Trade Commission, Generic Drug Entry Prior to Patent Expiration: an FTC Study (2002), available at <http://www.ftc.gov/os/2002/07/genericdrugstudy.pdf>.

48 For example, very recent reports express growing concern that the avian flu viruses sweeping Asia might migrate to humans and that adequate supplies of new medicines might not be available for a response. See Altman, Lawrence K., U.S. Issues Its First Plan for Responding to a Flu Pandemic, N.Y. Times, Aug. 26, 2004, at A17 Google Scholar.

49 Data on the concentration of the pharmaceutical industry are presented and referenced in Abbott, Frederick M., WTO Trips Agreement and Its Implications for Access to Medicines in Developing Countries, prepared for the British Commission on Intellectual Property Rights (Study Paper 2a, Feb. 2002)Google Scholar.

50 Id.

51 Regarding patent rent flows from TRIPS implementation generally, see World Bank, Global Economic Prospects and the Developing Countries 2002, ch. 5 & tbl. 5.1. See also Michael Finger, J., the Doha Agenda and Development: A View From the Uruguay Round 13–19, 25 (Asian Development Bank, 2002)Google Scholar. For estimates of patent rents from developing countries with respect to pharmaceuticals, see Abbott, supra note 49. Trade negotiators typically act on behalf of producer interests, see, e.g., Ernst–Ulrich, Petersmann, Challenges to the Legitimacy of the World Trading System: Democratic Governance and Competition Culture at the WTO, 7 J. Int’l Econ. L. 585, 603 (2004)Google Scholar, and in these negotiations would see their objective as maximizing future rents on behalf of their industrial patent holders.

52 This perspective is reflected in the common practice of regulating pharmaceutical prices in OECD countries other than the United States. See Organisation for Economic Co–operation and Development [OECD], Directorate for Financial, Fiscal and Enterprise Affairs, Committee on Competition Law and Policy, Competition and Regulation Issues in the Pharmaceutical Industry, Doc. DAFFE/CLP (2000) 29, tbls. A–7 through A–9 (Feb. 6, 2001). See also discussion of formulation and execution of EU policy in text at notes 53–54 infra. Consumers benefit from pharmaceutical research and development as well as from lower prices. However, the interests of pharmaceutical producers and consumers are not coextensive. Producers seek to maximize profits, and approach the development and sale of pharmaceuticals with this objective. This modus operandi leads to distortions from a public health standpoint, such as focusing on treatments for erectile dysfunction and advertising such treatments widely.

53 This division was particularly evident as the Council formulated a common position for the June 2002 TRIPS Council meeting. The Netherlands, for example, strongly supported an Article 30 approach, while Britain and Germany did not. Author’s discussions with interested officials and EC documents in author’s files (Apr.–June 2000).

54 Development agencies in the EU member states took different positions from those of industrial policy agencies.

55 See, for example, the European Union’s lack of support for the U.S. position on scope of diseases, text at notes 95–105 infra.

56 See, for example, McKinnell, Henry A., CEO of Pfizer, presentation at XV International AIDS Conference, Bangkok (July 2004)Google Scholar, quoted in Patent Protection Crucial for Next Generation of HIV/Aids Medicines (July 13, 2004), at <http://www.pfizer.com/are/news_releases/2004pr/mn_2004_0713.html>; and Harvey Bale, IFPMA director–general, presentation at the same conference.

57 See Maskus, Keith, Intellectual Property Rights in the Global Economy 160 (Inst, for Int’l Econ., 2000)Google Scholar (concluding that increased patent rent payments are probably the predominant impact on developing countries). See generally British Comm’n on Intellectual Property Rights, Integrating Intellectual Property Rights and Development Policy, ch. 2, Health (Sept. 2002)Google Scholar.

58 See Abbott, supra note 49, sec. II. C. Order–of–magnitude estimates suggest that $1–2 billion per year of pharmaceutical research budgets of companies based in the OECD may be dependent on developing country patent rents, while research and development expenditures by those companies in 1995 were in the $25 billion range, and are substantially higher today. The $28 billion per year public budget of the U.S. National Institutes of Health and its contributions to medicines research swamp patent rent contributions by developing countries. Dr. Elias Zerhouni, NIH director, said: “There’s no doubt that NIH has been a terrific federal investment. It has been at the basis, if you will, of most of the discoveries made in the past 50 years that have advanced our health.” National Press Club Luncheon with Dr. Elias Zerhouni, Director, National Institutes of Health (Mar. 6, 2003), available in Lexis, Legal Library, Fed. News. Serv. File.

59 See British Comm’n on Intellectual Property Rights, supra note 57; Trouiller, Patrice et al., Drug Development for Neglected Diseases: A Deficient Market and a Public–Health Policy Failure, Lancet, June 22, 2002, at 2188, available at <http://www.accessmed–msf.org>CrossRefGoogle Scholar.

60 For a critical perspective on the research contribution of the Pharma companies by the former editor in chief of the New England Jourml of Medicine, see Angell, Marcia, The Truth About the Drug Companies: How They Deceive Us And What To Do About It (2004)Google Scholar. See also Abbott, supra note 49.

61 See National Institute For Health Care Management Foundation, Changing Patterns of Pharmaceutical Innovation (2002), relied on by the U.S. Federal Trade Commission in its report on patents and competition, U.S. FTC, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, Ch. 3, pt. II (2003).

62 As noted in the next paragraph of the text, new medicines may reduce total health care costs. Nonetheless, less expensive new medicines would further reduce costs.

63 See Bale, Harvey E. Jr., The Conflicts Between Parallel Trade and Product Access and Innovation: The Case of Pharmaceuticals, 1 J. Int’l Econ. L. 637, 640 (1998)Google Scholar; DiMasi, J. A., Hansen, R. W., & Grabowski, H. G., The Price of Innovation: New Estimates of Drug Development Costs, 22 J. Health Econ. 151 (2003)CrossRefGoogle Scholar; Sykes, Alan O., Public Health and International Law: TRIPS, Pharmaceuticals, Developing Countries, and the Doha “Solution,” 3 Chi. J. Int’l L. 47 (2002)Google Scholar.

64 To the extent that patented medicines treat disease, they obviate the need for doctor and hospital visits, surgery, and so forth. Thus, even if a patented medicine has a high price in relation to a generic medicine, it may well be less costly than the alternatives.

65 For example, the number of new medicines that will be developed with and without the system in place, the market demand for such medicines in developed and developing countries, and what new disease burdens will arise.

66 See Reichman, Jerome H. With Catherine Hasenzahl, Non–Voluntary Licensing of Patented Inventions: Historical Perspective, Legal Framework Under Trips, and an Overview of the Practice In Canada and the USA 10–13 (UNCTAD/ICTSD Issue Paper No. 5, 2003), available at <http://www.iprsonline.org>Google Scholar.

67 That proposal relied on two legal avenues in the TRIPS Agreement: first, acknowledging the possibility for a comity–based recognition procedure under which an exporting country could give effect to a license issued by an importing country, and, second, expressly acknowledging that Article 30 (concerning exceptions to patent rights) could be used for the purposes of meeting public health needs through third–party export of medicines under patent. See Paragraphs 5 and 7 Ministerial Declaration on the TRIPS Agreement and Public Health, Proposal by the African Group, Bangladesh, Barbados, Bolivia, Brazil, Cuba, Dominican Republic, Ecuador, Haiti, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka, Thailand and Venezuela of Sept. 12, 2001, WTO Docs. IP/C/W/312 & WT/GC/W/450 (Oct. 4, 2001), discussed in Abbott, supra note 13, at 8–11. The problem posed by Article 31(f) had been identified by the European Commission as early as October 2000, in a text dealing with compulsory licensing posted on the Commission’s Web site. E–mail from Jean Charles Van Eeckhaute to the author (Aug. 27, 2004).

68 For example, prior to the Doha meeting the European Union floated a text based on Article 30 that proposed heavy restrictions, and was rejected by both developing countries and the United States (along with similarly minded countries) (informal proposal on file with author). See Vandoren & Van Eeckhaute, supra note 17, at 783 n. 16.

69 See TRIPS Council, Minutes of Meeting on 25–27 and 29 Nov., and 20 Dec. 2002, WTO Doc. IP/C/M/38 (Feb. 5, 2003). The “Motta text” of December 16, 2002, and the Decision are identical.

70 The United States stated that it was unable to join the consensus of other members on the scope–of–diseases issue. See the statement by U.S. Amb. Deily, infra note 96.

71 In early August 2003, Ambassador Menon convened a group of five delegations—Brazil, India, Kenya, South Africa, and the United States—to consider a proposal for a chairperson’s statement to accompany the adoption of the text of December 16, 2002. On August 21, the chair presented the text of a proposed chairperson’s statement to the five delegations. The United States indicated that from its perspective die proposal from the chair was essentially non–negotiable. It was the bare minimum that the United States would accept. Discussions of that group were undertaken in confidence. Following certain modifications to the proposal and the concurrence of those delegations, the chair proposed to the TRIPS Council that it recommend adoption of the text of December 16, 2002, to the General Council, to be preceded by the reading of the chairperson’s statement reflecting certain “shared understandings.”

72 The formal record of adoption is set out in General Council Minutes, supra note 10. Prior to the General Council meeting, an informal meeting of the five delegations that had negotiated the chairperson’s statement and other interested delegations was convened, with the purpose of explaining and clarifying the statement. This meeting was informal, but the delegate from South Africa who had co–chaired the meeting was requested to make a general report to the chair of the General Council prior to adoption of the Decision. While some delegations were not pleased with the short time frame in which they were asked to approve the chairperson’s statement or the lack of consultations during its preparation, there was agreement to move forward. Some delegations proposed making separate statements prior to the General Council’s adoption of the Decision, but, at the insistence of the United States, it was decided that any such statements would be made following its formal adoption.

73 Id., para. 16. The chair made several remarks that reflected the report by the South African delegate based on the informal consultations regarding the chairperson’s statement. Id., paras. 17–18.

74 Id., para. 19.

75 Id., paras. 29–30.

76 Id., para. 31.

77 Id., paras. 33–89.

78 The idea that the paragraph 6 solution might be limited to certain diseases surfaced in June and July of 2002. It was discussed at length at an informal meeting in July 2002 convened under the auspices of the Norwegian Ministry of Foreign Affairs and the Quaker United Nations Office at Utstein Kloster, Norway. For a summary, see QUNO Staff, Implementing Paragraph 6 of the Doha Declaration, Report on Workshop on the WTO TRIPS Agreement and the Protection of Public Health (July 20–23, 2002). Nonetheless, the scope–of–diseases issue did not become a major element of the negotiations until the TRIPS Council meeting of September 2002.

79 From the beginning, developing countries supported a broad construction of pharmaceutical products. See, for example, Communication from Kenya on Behalf of the African Group, WTO Doc. IP/C/W/351 (June 2002), though the issue was not addressed in great detail in the early papers. E.g., Communication from Brazil on Behalf of Bolivia, Brazil, Cuba, China, Dominican Republic, Ecuador, India, Indonesia, Pakistan, Peru, Sri Lanka, Thailand and Venezuela, WTO Doc. IP/C/W/355 (June 2002); Second Communication from the United States, WTO Doc. IP/C/W/358 (July 2002).

80 NGOs, including MSF and the Consumer Project on Technology (CPTech), played key roles in pointing out the extent of public health problems. See, e.g., MSF (Dr. Mary Moran), Reneging on Doha: An MSF Analysis of Recent Attempts to Restrict Developing Countries’ Use of Compulsory Licensing to a Set List of Diseases (2003). NGOs played a key role in pressuring the United States on the scope–of–diseases issue. See MSF, Oxfam, Health Action International, Third World Network, & CPTech, Joint Press Release, US Seeks Further Restrictions on Generic Medicines for Developing Countries (Aug. 25, 2003)Google Scholar; MSF, Open Letter to the Members of the WTO (June 6, 2003)Google Scholar; Letter from CPTech, Oxfam, MSF and HAI to WTO Delegates Regarding December 16, 2002 Chairman’s Text for “Solution” to Paragraph 6 of the Doha Declaration on TRIPS and Public Health (Dec. 19, 2002)Google Scholar; CPTech, MSF, Oxfam, & Third World Network, NGOs: Say No to Poisonous Proposals on Paragraph 6 (Nov. 25, 2002)Google Scholar; notes 43–48 supra. All but the last two listed sources are available on the MSF Web site, <http://www.access–msf.org>. The last two sources are available at <http://www.cptech.org/ip/wto/p6/>.

81 See, e.g., Communication from the African, Caribbean and Pacific Group of States (ACP), WTO Doc. IP/C/W/ 401 (May 28, 2003), quoted in text at note 102 infra,

82 See, e.g., Sign–on Letter to U.S. Trade Representative Zoellick Circulated by Health GAP and Médecins sans Frontières (Dec. 16, 2002), available at <http://www.healthgap.org/press/press_releases.html>.

83 See USTR Press Release, U.S. Announces Interim Plan to Help Poor Countries Fight HIV/AIDS and Other Health Crises in Absence of WTO Consensus (Dec. 20, 2002).

84 The nonpaper appeared in Inside U.S. Trade on October 25, 2002. South Africa submitted it for informal circulation to the TRIPS Council as Substantive and Procedural Elements of a Report to the General Council Under Paragraph 6 of the Declaration on the TRIPS Agreement and Public Health, WTO Ref. Job(02)/156 (Nov. 4, 2002) [hereinafter South Africa Nonpaper]. Members speaking in support included Argentina, Bolivia, Brazil, Botswana, Cuba, Egypt, India, Indonesia, Kenya, Malaysia, Pakistan, Peru, the Philippines, Sri Lanka, and Thailand. This list is not meant to imply that only the listed members supported the positions in the paper but, rather, to identify the members that expressed their views in the meeting (from meeting notes of participant as furnished to author).

85 A limited view of the scope of diseases was also supported by Japan, see, e.g., Japan proposal for compromise (Feb. 2003) (on file with author) (containing list of diseases to be expanded on decision of TRIPS Council), Switzerland, and other members where Pharma companies are based. The Swiss moratorium adopted following the U.S. rejection of the Motta text referred to a limited scope of diseases. Switzerland, State Secretary for Economic Affairs, Press Release, On the Negotiations in WTO on Access to Drugs in Developing Countries (Dec. 22, 2002) [hereinafter Swiss Press Release] (on file with author). Although at one point the European Union made a proposal to limit use of the solution to “grave” conditions, see Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: Elements for a Compromise Solution, reprinted in Inside U.S. Trade as Text: EU Trips Paper (Nov. 1, 2002) [hereinafter EU Trips Paper], the European Commission takes the position that it did not intend to limit the scope of the solution; nor is it so limited. See Vandoren & Van Eeckhaute, supra note 17. The EU Draft Regulation, discussed in text at note 111 infra, confirms the EU perspective.

86 The USTR’s position was taken in view of the position of me Pharma companies. See, for example, Drug Companies Push for Limits on Disease Coverage in Drug Patent Deal, Inside U.S. Trade, Nov. 22, 2002 Google Scholar, noting:

The leading executives of 20 U.S. research–based pharmaceutical companies this week urged U.S. Trade Representative Robert Zoellick to ensure new World Trade Organization rules allowing countries greater flexibility to import generic copies of patented drugs are limited only to medicines for serious epidemics, and do not allow the overriding of patents dealing with diseases like cancer, heart disease or diabetes.

87 See USTR Press Release, supra note 83.

88 As reported to the author by several TRIPS Council delegates, the United States strongly objected to distribution of the chair’s draft text of November 20, 2002, which stated that it was “understood that the reference to public health problems is not limited to the three specific diseases mentioned therein or to epidemics.” Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, Draft Legal Language for General Council Decision (Nov. 20, 2002) [hereinafter Nov. 20 Draft].

89 See note 95 infra.

90 See Abbott, Frederick M., The Doha Declaration on the TRIPS Agreement and Public. Health: Lighting a Dark Corner at the WTO, 5 J. Int’l Econ. L. 469, 485 (2002)Google Scholar.

91 Paragraph 5(b) is directed to all compulsory licensing of medicines, and not a limited set of medicines.

92 In paragraph 5(c), members made clear that the fast track under Article 31 (b) of the TRIPS Agreement could be used for diseases that required urgent attention.

93 See text of paragraph 6, in text following note 2 supra.

94 The language “as referred to in paragraph 1” appeared in the chairman’s first note of October 17, 2002. The draft legal language of November 19 dropped the “as.” A substantially different proposal was made on November 20, 2002, when “as referred to in” language was restored but qualified as indicated supra note 88. In the draft of November 24, 2002, the legal language as it appears in the Decision was first used.

95 The United States promptly declared a limited unilateral moratorium on bringing dispute settlement actions based on its own view of the desired negotiating outcome. The U.S. moratorium applied to “HIV/AIDS, malaria, tuberculosis, and other infectious epidemics of comparable gravity,” including, “for example, ebola, African trypanosomiasis, cholera, dengue, typhoid, and typhus fevers.” USTR Press Release, supra note 83. The moratorium excluded high–income developing countries as defined by the World Bank. In making its announcement, the USTR stated:

Some WTO members and advocacy organizations sought to expand the targeted “poor country epidemic” focus of Doha to allow much wealthier countries to override a wide range of drug patents, for example, Viagra. This approach could seriously undermine the WTO rules on patents that provide incentives for development of new pharmaceutical products, including those to treat diseases of a non–epidemic nature.

The European Union and Switzerland followed with their own moratoriums (the former based on the December 16 text). Letter from Pascal Lamy to WTO Trade Ministers (Jan. 7, 2003), reprinted in Inside U.S. Trade, Jan. 10, 2003; Swiss Press Release, supra note 85.

96 “The representative of the United States regretted its inability to join the consensus on the Chairman’s draft text of 16 December . . . . She [Amb. Deily] indicated that her delegation was willing tojoin the consensus on all parts of the draft, except the one on the scope of diseases.” TRIPS Council, supra note 69, para. 34 (emphasis added).

97 The United States attempted to divide countries on this issue by accentuating immediate African interests in addressing HIV/AIDS, and by suggesting that prospective exporting countries were not giving those interests adequate attention while pursuing their own agendas. See, e.g., Media Round Table with USTR Zoellick, Robert B., Pretoria, South Africa (Jan. 13, 2003)Google Scholar, available at <http://www.usembassy.it/file2003_01/alia/a3011403.htm> (stating that despite the intention of paragraph 6 to assist countries that lacked the “capacity to produce pharmaceuticals on their own, all of a sudden everyone else wants to get it too. Okay? So, Brazil and India and people who frankly may not have Africa’s best interests at heart decide, well, we need to be able to get this.”).

98 See EU Proposal on Scope of TRIPS and Health Compromise Faces Criticism, Inside U.S. Trade, Jan. 17, 2003 Google Scholar (comments by Jonathan Quick, director of the WHO Essential Drugs and Medicines Division). Although the proposal was criticized by the Essential Drugs and Medicines Division, the author was advised (by EU officials) that the European Union had discussed the proposal with others at the WHO before making it and had received support.

99 Tokyo Meeting Fails to Dislodge Impasse on TRIPS and Health, Inside U.S. Trade, Feb. 21, 2003 Google Scholar.

100 Id.

101 See, e.g., Pharmaceutical Companies Close to New Joint Position on TRIPS, Inside U.S. Trade, July 11, 2003 Google Scholar.

102 Communication from the African, Caribbean and Pacific Group of States (ACP), supra note 81.

103 A significant concern of developing members regarding the chair’s August 21 proposal related to a subtle attempt to restrict the scope of diseases. The introduction to the draft statement provided, inter alia: “This Decision is part of the wider national and international action to address problems identified in paragraph 1 of the [Doha] Declaration” (emphasis added). Text: Draft Chairman’s Statement (Aug. 21, 2003), Inside U.S. Trade, Aug. 27, 2003.

Developing country members had succeeded in intensive negotiations in eliminating language in the product definition of the December 16 text as to public health problems “referred to” in paragraph 1 of the Doha Declaration. The term “identified in” might again be understood to imply a reference to the express list of diseases (and other epidemics) in paragraph 1. The United States agreed to track the “as recognized” text in the final version of the chairperson’s statement.

104 Vandoren & Van Eeckhaute, supra note 17, at 785, state: “It is now generally recognized that the disease scope of the Doha Declaration, and hence of the Decision, is flexible, and should encompass any serious public health problem.” Correa states: “As the negotiation of the Decision made clear, it applies to pharmaceutical products for any disease. The three mentioned epidemics are only special cases—that certainly deserve particular attention— but the system established by the Decision is not limited to products related to them.” He also notes that “the Decision is not limited to ‘grave’ diseases, since ‘gravity’ in paragraph 1 of die Declaration is generally referred to ‘the public health problems’ and is not intended to qualify the type of diseases to be addressed.” Correa, Carlos M., Implementation of the WTO General Council Decision On Paragraph 6 of the Doha Declaration On The Trips Agreement and Public Health 11 (2004), available at <http://www.who.int>>Google Scholar (emphasis added). This interpretation is confirmed by the European Union in its Draft Regulation, see infra text at note 111.

105 By the express terms of paragraph 1, the Decision covers active pharmaceutical ingredients (APIs) and diagnostic test kits, in addition to finished pharmaceutical products. The reference to APIs is important since many developing country pharmaceutical sectors are able to formulate finished products from APIs and other ingredients, which allows formulators to operate with imported APIs. By referring to products of the pharmaceutical sector, the definition of pharmaceutical product appears to encompass “vaccines.” Accord Vandoren & Eeckhaute, supra note 17, at 784; Correa, supra note 104, at 10. See definitions of “pharmaceutical,” “medicinal drug,” and “sector” in 1, 2 The New Shorter Oxford English Dictionary (3d ed. rev. 1993).

106 This legislation was introduced after Stephen Lewis, the UN secretary–general’s special ambassador for HIV/AIDS to Africa, suggested that Canada implement the Decision. Prime Minister Jean Chrétien promptly took up the proposal, and the first bill (C–56) was introduced on November 6, 2003. The HIV/AIDS Legal Network, a Canadian NGO, played the lead role in organizing the lobbying effort by access–oriented NGOs. Documentation concerning the legislation, including submissions from all stakeholders, is available at the Web site of the HIV/ AIDS Legal Network, <http://www.aidslaw.ca/Maincontent/issues/cts/patent–amend.htm>. The Pharma industry’s lobbying effort was led by Rx&D, the organization of Canada’s research–based companies. See, e.g., Rx&D, Providing Affordable Medicines to Patients in the Developing World (Feb. 2004)Google Scholar. The Standing Committee on Industry, Science and Technology of the House of Commons was principally responsible for reviewing the government’s proposals, holding hearings, and adopting amendments. This author was invited by the committee to testify as an independent expert and provided written submissions, as well as testimony, on March 10, 2004, all of which is available at the parliamentary Web site, <http://www.parl.gc.ca>.

107 Chase, Steven & Scoffield, Heather, Ottawa Leans Toward Limits on Cheap–Drug Distribution; Export of Generics to Poor Countries Likely to Target Only AIDS, Malaria and TB for Now, Globe & Mail, Oct. 16, 2003, at A9 Google Scholar.

108 See, e.g., Abbott, Frederick M., Canada and the Decision on Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, The North–South Institute/L’Institut Nord–Sud, Ottawa (Oct. 21, 2003), available at <http://www.nsi–ins.ca/ensi/doc/implementation_of_paragraph.ppt>Google Scholar.

109 Bill C–9, An Act to Amend the Patent Act and the Food and Drugs Act (The Jean Chretien Pledge to Africa), R.S.C., ch. P–4 (2004)Google Scholar [hereinafter Canadian Medicines Export Act]. Section 21.02 defines pharmaceutical products that may be exported under the Act by reference to schedule 1. Section 21.03 provides that the governor in council, on the recommendation of the minister (leading the council) and the minister of health, may amend schedule 1. The appointment (within three years) of an advisory committee regarding recommendations on amendments to the schedule of covered products is provided for in section 21.18.

110 Norway played an active role in the negotiating process of the Decision, including by providing a forum for an important meeting of stakeholders. Although Canada’s Act has been more widely publicized, Norway was the first country to adopt implementing legislation. On December 19, 2003, Norway amended section 49 of its Patents Act (entered into force February 1, 2004) to add a new fifth paragraph stating: “A compulsory licence shall be issued mainly with a view to supplying the domestic market. The King may by regulations prescribe rules that deviate from this.”

The Ministry of Justice and the Police laid down regulations by Royal Decree of May 14, 2004, Regulations Amending the Patent Regulations in Accordance with the Decision of the WTO General Council of 30 August 2003, pursuant to sections 49 and 69 of the Act of 15 December 1967, No. 9 Relating to Patents [hereinafter Norway Regulations]. For the amendment to the Patent Act and the regulations, see Consultation—Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health in Norwegian Law (Mar. 2, 2004), available at <http://www.dep.no/ud/engelsk/p2500832/p30003923/032121–290003/index–doc000–n–n–a.html> [hereinafter Norway Consultation]. Section 108(2) refers to products covered by paragraph 1 (a) of the Decision.

111 Proposal for a Regulation of the European Parliament and of the Council on Compulsory Licencing of Patents Relating to the Manufacture of Pharmaceutical Products for Export to Countries with Public Health Problems, COM(2004) 737, Art. 2(a) [hereinafter EU Draft Regulation], See also Article 2(1) of the EU Draft Regulation and the cross–reference to Article 1(2) of Council Directive 2001/83/EC, 2001 O.J. (L. 311) 67.

112 This interpretation is confirmed by Article 1 (4) of the 2001/83/EC directive, which includes vaccines in the definition of “immunological medicinal product.” Directive 2001/83/EC, supra note 111, Art. 1(2).

113 State Secretary for Economic Affairs, Policy Rules on Issuing Compulsory Licences Pursuant to WTO Decision WT/L/540 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, Under Section 57, Subsection 1 of the Kingdom Act on Patents of 1995, Art. 1 (c) (Dec. 17, 2004) [hereinafter Netherlands Policy Rules].

114 Id., Explanatory Notes.

115 Indian Ordinance, supra note 26, para. 54 (adding §92A to the principal Act). The ordinance may be modified as the Indian Parliament adopts amendments to the Patents Act.

116 E–mail to the author from Felix Addor, chief legal officer and deputy director general, Swiss Federal Institute of Intellectual Property (Mar. 11, 2005). The initially proposed draft, Transposition into the Swiss Law of the WTO Decision of 30 August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, adding new Article 40c to the Swiss Patent Law, was available as of April 4, 2005, at <http://www.ige.ch/E/jurinfo/documents/jl0019e.pdf> [hereinafter Swiss Transposition]. The revised draft is not yet publicly available.

117 Swiss Transposition, supra note 116, Explanatory Report.

118 See U.S. proposal of June 2002, note 79 supra.

119 See WHO, Report by the Secretariat to the Executive Board, Manufacture of Antiretrovirals in Developing Countries and Challenges for the Future, Doc. EB114/15 (2004), available at <http://www.who.int/gb/e/e_eb114.html>>Google Scholar; Kaplan, W. A. Et Al., Is Local Production of Pharmaceuticals A Way To Improve Pharmaceutical Access in Developing and Transitional Countries? Setting a Research Agenda (2004), available at <http://www1.worldbank.org/hnp/hsd/documents/LOCALPRODUCTION.pdf>Google Scholar. The complexity of API manufacturing varies depending on the medicine. The production of the APIs used in antiretroviral medicines is complex, and only a few companies worldwide produce those APIs.

120 This function involves combining APIs with excipients and binders; creating tablets, capsules, and other means of administration; and finally packaging the finished products for distribution. Kaplan Et Al., supra note 119.

121 See, e.g., Elements of a Paragraph 6 Solution, Communication from Kenya as Coordinator of the African Group, WTO Doc. IP/C/W/389 (NOV. 14, 2002)Google Scholar.

122 Whether it is desirable to increase production in Africa is a subject of intensive debate. See, e.g., Love, James, Remarks, Duke University Law School Conference on International Public Goods and Transfer of Technology Under a Globalized Intellectual Property Regime (Apr. 4–6, 2003)Google Scholar (questioning local production in Africa on inefficiency grounds) (notes on file with author).

123 The developing country position on this subject was reflected in the South Africa Nonpaper, supra note 84, paras. 6–8.

124 See, for example, the U.S. exclusion of high–income developing countries as defined by the World Bank in the announcement of the post–December 20, 2002 moratorium, USTR Press Release, supra note 83.

125 Note by the Secretariat, Available Information on Manufacturing Capacity for Medicines, WTO Doc. IP/C/ W/345 (May 24, 2002) (principally relying on studies by the United Nations Industrial Development Organization noting problems of gaps in data by country and dating of information).

126 EU TRIPS Paper, supra note 85. The rationale for this proposal was not fully apparent. It would have mandated division of the production chain and likely increased costs.

127 See U.S. position at Tokyo miniministerial meeting in text at note 100 supra.

128 Classification of a country as developed or developing according to GATT/WTO custom and practice is a matter of self–selection by the member. See Abbott, Frederick M., China in the World Trading System: Defining The Principles of Engagement 26–28 (1998)Google Scholar. Article XI:2 of the Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, in WTO, The Legal Texts, supra note 2, at 3 [hereinafter WTO Agreement], which addresses original membership in the WTO, refers to commitments and concessions to be undertaken by least–developed countries recognized as such by the United Nations. So far, the practice under the WTO Agreement appears to be that status as a least–developed country is determined by reference to the UN list. However, it is not clear that this practice is mandated by the text of any WTO agreement.

129 Moreover, because least–developed members are not required to enforce patents until January 1, 2016, they do not need to issue compulsory licenses to import products should they choose to exercise this right of nonenforcement. Footnote 6 to paragraph 2(a)(iii) of the Decision, supra note 3, provides that the requirement imposed on eligible importing members to issue compulsory licenses with respect to products under patent in their territory “is without prejudice to Article 66.1 of the TRIPS Agreement,” which is the specific provision under which the TRIPS Council authorized nonenforcement of patents by least–developed members. “[P]aragraph 7 of the [Doha] Declaration constitutes a duly motivated request by the least–developed country Members for an extension of the period under paragraph 1 of Article 66 of the TRIPS Agreement.” TRIPS Council, Decision of 27 June 2002, pmbl., available at <http/Avww.wto.org/english/news_e/pres02_e/pr301_e.htm>. Thus, in using the system established by the Decision, a least–developed member may elect the alternatives of nonenforcement or compulsory licensing.

130 The extent to which the opting–out members have relinquished that right is not entirely clear. A stronger argument might be made that countries opting out directly in the text of the Decision are not free to modify their status, as contrasted with those that merely stated their intention to the General Council.

131 Decision, supra note 3, para. 1(b).

132 There is little apparent rationale for this requirement, particularly in light of the requirement that notifications be made in connection with specific uses of the system, and it has been criticized as an attempt at politically pressuring members not to use the system.

133 Vandoren & Van Eeckhaute state: “What matters is that the Member in question be able to explain how the self–assessment has been performed. The related notification requirement is for information purposes only. It cannot be reversed or rejected by any other Member or by the TRIPS Council.” Vandoren & Van Eeckhaute, supra note 17, at 785; accord Correa, supra note 104, at 17–18.

In a statement following the adoption of the Decision, the delegate from India clarified this point on the basis of the negotiation of the chairperson’s statement, saying: “It had been clarified during the consultations that this did not involve provision of a great deal of technical or other information, but only the brief and concise indication of the methodology for determination of insufficient capacity and the conclusions that were drawn on the basis of available data.” General Council Minutes, supra note 10, para. 52.

134 A member’s eligibility to import ends when it has established adequate internal manufacturing capacity for the product in question.

135 See discussion infra in text at note 198. Ultimately, entry of diverted products into the European Union is under the control of EU customs authorities, so not too much on this account is necessarily left to the authorities of beneficiary countries.

136 The Philippine delegate said at the TRIPS Council meeting of June 4–5, 2003: “the Philippines . . . had been told in bilateral settings that, on the basis of the 16 December text, the Philippines had some manufacturing capacity that would disqualify it from availing itself of the proposed solution.” TRIPS Council, Minutes of Meeting on June 4–5, 2003, WTO Doc. IP/C/M/40, para. 52 (Aug. 22, 2003).

137 Canadian Medicines Export Act, supra note 109, §21.04(3)(d)(iii); Norway Regulations, supra note 110, §107; Netherlands Policy Rules, supra note 113, Art. 1(f); Indian Ordinance, supra note 26, §92A; Swiss Transposition, supra note 116, Explanatory Report, “Granting conditions”; EU Draft Regulation, supra note 111, Art. 6(1)(b).

138 Also, in each case least-developed countries are automatically eligible.

139 A prospective importing country could join the WTO to become eligible to benefit from the system. Accession to the WTO is typically a multiyear process. Currently, more than twenty–seven countries are at some stage in the accession process, including Algeria, Laos, Lebanon, the Russian Federation, Ukraine, and Vietnam, and there are several additional observer countries. Countries that are neither in the process of accession nor observers include Liberia, Syria, and Turkmenistan. WTO Web site, supra note 1 (last modified Feb. 1, 2005).

140 Canadian Medicines Export Act, supra note 109, §21.03(d)(ii); Norway Regulations, supra note 110, §107; Indian Ordinance, supra note 26, §92A; Swiss Transposition, supra note 116, Art. 40c, & Explanatory Report, “Countries of importation.” If some member were prepared to initiate a challenge to the supply of nonmember countries, this would bring Article 30 of the TRIPS Agreement into play. An Article 30 exception to supply nonmembers under the Decision would be limited in the sense that it would apply only to non–WTO members (and would include conditions, such as diplomatic acceptance of responsibilities comparable to those of importing members). Such an exception would not unreasonably interfere with the normal exploitation of the patent since it would be consistent with the waiver established by die Decision and would not unreasonably prejudice the legitimate interests of the patent holder, taking into account the legitimate interests of third parties. Third–party interests, i.e., those of the patient community, are very strong in this situation.

141 Netherlands Policy Rules, supra note 113, Art. 1(f).

142 Canadian Medicines Export Act, supra note 109, §21.03(b) (for least–developed non–WTO members), §21.03(d)(ii) (for other non-WTO members). Least–developed nonmembers must provide Canada with a diplomatic notice in writing of agreement not to use the product for commercial purposes and to adopt measures referred to in paragraph 4 of the Decision. Other nonmembers must be on the OECD list of countries eligible for development assistance. They must provide Canada with a diplomatic notice in writing of an emergency situation and agreement not to use the product for commercial purposes and to adopt measures referred to in paragraph 4 of the Decision. See also Norway Regulations, supra note 110, §§107,109; Netherlands Policy Rules, supra note 113, Arts. 1(f), 3(3)(b); Swiss Transposition, supra note 116, Art. 40c.

143 Canada—Patent Protection of Pharmaceutical Products, WTO Doc. WT/DS114/R (adopted Apr. 7, 2000) [hereinafter Canada—Pharmaceuticals], discussed in Abbott, supra note 13; Abbott, Frederick M., WTO Dispute Settlement Practice Relating to the Agreement on Trade–Related Aspects of Intellectual Property Rights, in The WTO Dispute Settlement System 1995–2003, at 421 (Ortino, F. & Ernst–Ulrich, Petersmann eds., 2004)Google Scholar; Howse, Robert L., The Canadian Generic Medicines Panel: A Dangerous Precedent in Dangerous Times, 3 J. World Inteli. Prop. 493 (2000)Google Scholar.

144 Canada—Pharmaceuticals, supra note 143, paras. 7.30–.31.

145 For example, the panel said: “In theory, the rights of the patent owner are generally viewed as a right to prevent competitive commercial activity by others, and manufacturing for commercial sale is a quintessential competitive commercial activity . . . .” Id., para. 7.35; see also id., para. 7.45.

146 See Abbott, supra note 13, at 22–24.

147 See Abbott, Frederick M., Legal Options for Implementing Paragraph 6 of the Ministerial Declaration on i he TRIPS Agreement and Public Health (July 21, 2002)Google Scholar (suggesting such an option); Maico C. E.J., Bronckers, Legal Options for Implementing Paragraph 6 of the Ministerial Declaration on the TRIPS Agreement and Public Health (July 21, 2002), both available at <http://www.quno.org>>Google Scholar.

148 For the views of developing countries, see Communication from Brazil, supra note 79. Medicines–access–oriented NGOs circulated a substantial number of analytical papers throughout the negotiations. These papers addressed the Article 30/Article 31 issue. See, e.g., MSF, Why Article 30 Will Work. Why Article 31 Will Not (June 24, 2002)Google Scholar; MSF, Oxfam, CPTrech, Health Gap, Third World Network, & Essential Action, Joint Letter to Members of TRIPS Council (Jan. 28, 2002), available at <http://www.accessmed–msf.org>>Google Scholar. The WHO’s preference was based largely on the results of Correa, supra note 13, at 25–32. At the September 2002 TRIPS Council meeting, a representative of the WHO presented its view that a solution based on authoritative interpretation of Article 30 would be most consistent with the objectives of the Doha Declaration. The U.S. delegate expressed surprise that the WHO was indicating its preference for a form of solution since, as a member of the WHO, the United States had not been consulted on that question. TRIPS Council, Minutes of Meeting on 17–19 Sept. 2002, WTO Doc. IP/C/M/37 (Oct. 11, 2002).

149 See text at notes 13–18 supra.

150 In June 2002, the United States referred to a “growing consensus among certain Members” in favor of Article 31 (f) as the basis for a solution. The United States objected to the use of Article 30 on the grounds that it was intended to address statutory exceptions predating the TRIPS Agreement, and that action under it would unreasonably conflict with the normal exploitation of patents and would unreasonably prejudice patent holder interests. It argued that Article 30 did not provide for (1) case–by–case evaluation, (2) notice to the patent holder, (3) conditions of license and expiration, and (4) remuneration. Second Communication from the United States, supra note 79, paras. 17, 31.

151 Article 28 of the TRIPS Agreement expressly gives the patent holder the right to prevent making, using, selling, offering for sale, and importing a covered product. There is no enumerated right to prevent exporting, which allows some scope for arguing that patent holders are not entitled to prevent exports, or at least that greater flexibility may be permitted to allow exports by parties other than patent holders under Article 30. From a technical perspective, the patent confers a right to exclude others from “making” a product, so allowing production for export may interfere with a patent holder right, even if there is no enumerated “export” right.

152 The use of Article 30 does not, in fact, preclude the imposition of remuneration requirements, nor does it in fact assure that bureaucratic procedures will not be imposed. By way of illustration, the U.S. “Bolar” regulatory review exception is implemented via a bureaucratic and judicial maze. See Fed. Trade Comm’n, supra note 47.

153 See Vandoren & Van Eeckhaute, supra note 17, at 783; e–mail from Van Eeckhaute to the author (Mar. 26, 2004).

154 See note 53 supra regarding the European Council debate on establishing the June 2002 negotiating position.

155 Communication from Kenya on Behalf of the African Group, supra note 79.

156 See Communication from Kenya as Coordinator of the African Group, supra note 121. The African Group benefits from incremental flexibility for regional arrangements, see text at note 202 infra, which may assist it in dealing with an Article 31 approach.

157 See, e.g., Zoellick Pushes for Limits in TRIPS Deal, But Supports Compromise, Inside U.S. Trade, Nov. 22, 2002 Google Scholar.

158 Vandoren and Van Eeckhaute count a total of three waivers: for Article 31(f), relating first to exporting members in general (para. 2), and second to regional groups (para. 6); and third for Article 31(h) (para. 3). Vandoren & Van Eeckhaute, supra note 17, at 782.

159 The negotiations are discussed in text at notes 214–22 infra.

160 These obligations and assurances are described in text at notes 196–201 infra.

161 Decision, supra note 3, para. 9, and general structure as limited waiver of identified provisions.

162 While the waiver option is directed at Article 31 (f) and (h), there are elements of the Decision that arguably affect other provisions and obligations of the TRIPS Agreement. For example, paragraph 4 of the Decision requires importing members to take measures proportional to their means to prevent diversion of products. This requirement is in the nature of an enforcement obligation (which might involve providing the basis for remedial action to private patent holders). It may implicate part III of the TRIPS Agreement (regarding enforcement). The question of which articles of the TRIPS Agreement may be affected by the Decision becomes important in considering the best means for amending the Agreement.

163 See Vandoren & Van Eeckhaute, supra note 17, at 783.

164 This procedure is consistent with the text of Article 31, and is reflected in the practice of many countries that provide for determination of compensation after a license is granted, including the United States with respect to governmental use of patents. See UNCTAD/ICTSD, supra note 13, at 468, 477–79.

165 Id. at 468.

166 The initial U.S. position in the paragraph 6 negotiations was that a dispute settlement moratorium would be adequate to address the issue. Communication from the United States, WTO Doc. IP/C/W/340 (Mar. 14, 2002).

167 Drafts on file with author.

168 Bill C–56, section 21.04(6)–(7); and Bill C–9, section 21.04(6)–(7), as initially introduced February 12, 2004 (ultimately the Canadian Medicines Export Act, supra note 109).

169 Bill C–56, §21.04(6)–(7); Bill C–9, §21.04(6)–(7).

170 Negotiation of a medicines supply agreement is a costly and time–consuming endeavor. If patent holders could simply take contracts without paying compensation, it is doubtful that many generic producers would be willing to spend the time and effort to conclude them. After a few takeover incidents, generic producers would give up.

171 See Abbott, Frederick M., Prepared Remarks for Standing Committee on Industry, Science and Technology, supra note 106 Google Scholar. Patent holders do not want generic producers to enter their markets, and there is a large spread between the marginal cost of producing drugs and the prices charged for them. Patent holders would have an incentive to take over contracts successfully negotiated by generic producers (and could probably do so profitably), if for no other reason than to prevent the emergence of competition.

172 Canadian Medicines Export Act, supra note 109, §21.04(3)(c).

173 This viewpoint was reiterated by the Canadian representative to the QUNO meeting Implementing the Paragraph 6 Decision and Doha Declaration: Solving Practical Problems to Make the System Work, Jongny–sur– Vevey, Switzerland (May 21–23, 2004).

174 See supra notes 164–65 and corresponding text.

175 TRIPS Agreement, supra note 2, Art. 44.2.

176 Section 108(1) provides that the applicant shall have attempted to obtain a voluntary license to the extent required by section 49 of the Patents Act. In explaining this provision, the government said:

One condition for obtaining a compulsory licence is that the producer has first unsuccessfully tried to obtain a voluntary licence, cf. Article 31 (b) of the TRIPS Agreement. This is not necessary in the case of a national emergency or other circumstances of extreme urgency or in cases of public non–commercial use.

Norway Consultation, supra note 110.

177 EU Draft Regulation,supra note 111, Explanatory Memorandum, para. 3.

178 EU Draft Regulation, supra note 111, Art. 7.

179 See Vandoren & Van Eeckhaute, supra note 17.

180 Yet the provision on payment of royalties in the exporting country recognizes that the level of remuneration should take into account the economic value of the authorization to the importing country. EU Draft Regulation, supra note 111, Art. 8(9).

181 Netherlands Policy Rules, supra note 113, Explanatory Notes, pt. II, Art. 2.

182 Indian Ordinance, supra note 26, §92A.

183 Swiss Transposition, supra note 116, Art. 40d.

184 The strategies and tactics that developing countries used in pursuit of the public health agenda at the WTO have been further built upon in the formation of the G20+ and Group of 90, and have yielded positive results in the field of agriculture. See, e.g., G20 Defends Agriculture Proposal from U.S., EU Criticism, Inside U.S. Trade, June 4, 2004 Google Scholar.

185 See, e.g., Sell, Susan, Private Power, Public Law: The Globalization of Intellectual Property Rights 96–108 (2003)Google Scholar (discussing formation of trilateral coalition on TRIPS for Uruguay Round).

186 This suggests that in the post–Cold War era the two major trading powers may be more willing to adopt a heightened competitive approach to trade relations with developing countries than they were earlier when faced with common political and economic threats.

187Accord Maskus, Keith & Reichman, Jerome, The Globalization of Private Knowledge Goods and the Privatization of Global Public Goods, 7 J. Int’l Econ. L. 279, 314–16 (2004)Google Scholar.

188 This lesson was also learned earlier by the United States, the European Union, and Japan. During the Uruguay Round TRIPS negotiations, the United States and the European Union differed significantly on various technical intellectual property rights issues, such as a first–to–invent or first–to–file patent priority, and the publication of patent applications. Yet those differences took a back seat to the core industrial policy matters, such as extending a broad requirement of product patent protection throughout the developing countries. See, e.g., Sell, supra note 185, at 96–120.

189 NGO activity has been essential to building support for policies and to resisting counterpressures. Accord id. at 146–62.

190 Developing country inability to reach agreement on this issue was due at least in part to a belief that the United States and the European Union would not compromise on it. See supra text at note 157.

191 See Abbott, Frederick M., The Future of IPRs in the Multilateral Trading System, in Trading In Knowledge 36 (Bellman, C., Dutfield, G., & Melendez–Ortiz, R. eds., 2003)Google Scholar; Maskus & Reichman, supra note 187, at 316.

192 See WTO Committee on Trade and Development, Participation of the Developing Economies in the Global Trading System, Doc. WT/COMTD/W/l, paras. 3, 25, 29, & tbl. 1 (2004). Regarding the growing importance of China in world markets, including as an importer of raw materials and destination of foreign direct investment, see Rohter, Larry, China Widens Economic Role in Latin America, N.Y. Times, Nov. 20, 2004, at A1 Google Scholar.

193 Regarding India, see WTO Committee on Trade and Development, supra note 192. Regarding Brazil, see, for example, Brazil Posts Respectable $3.172bn Trade Surplus Sep, AE–Brazil, Oct. 1, 2004 Google Scholar (noting that “[t]he country accumulated a $32.125 billion trade surplus in the 12 months ended September, resulting from exports of $90.542 billion and imports of $58.447 billion”).

194 WTO Committee on Trade and Development, supra note 192, app., tbl. 2.

195 Two useful analyses of the Decision are Vandoren & Van Eeckhaute, supra note 17, which reflects the views of the European Commission’s delegation to the negotiations, and Correa, supra note 104.

196 Decision, supra note 3, para. 2(a)(i) & (iii).

197 Accord Vandoren & Van Eeckhaute, supra note 17, at 789.

198 Decision, supra note 3, para. 4. The text of paragraph 4 does not mandate a particular form of measure to prevent diversion. Since governments do not maintain standing bodies of patent “police,” it would not generally be consistent with the notion of proportionality to create a new public enforcement arm to implement the Decision. In the general context of public health, governments typically require that controls be exercised over medicine supply chains, and it is through such generally accepted public health controls that governments may exercise vigilance over the movement of medicines supplied under the system. See also Vandoren & Van Eeckhaute, supra note 17, at 787. The Decision also imposes a general obligation on members to provide means to prevent diversion of medicines supplied under the system into their territories, “using the means already required to be available under the TRIPS Agreement.” Decision, supra, para. 5.

199 Decision, supra note 3, para. 2(b)–(c).

200 Id., para. 2(b)(ii); see also General Council Minutes, supra note 10, para. 29 (chairperson’s statement).

201 The information is to be posted by the licensee, and the exporting member must notify the TRIPS Council of the address of the relevant Web site. Decision, supra note 3, para. 2(b)(iii) & (c).

202 Id., para. 6. The provision limits its territorial scope by reference to regional arrangements that are made up at least half by least–developed countries, which was understood to capture only regional arrangements in Africa. The restriction of regional flexibility to Africa is not easy to explain from the standpoint of regions such as the Caribbean, Central America, and East Asia, where there are very serious public health problems and limited pharmaceutical–manufacturing capacity.

203 Paragraph 6 of the Decision expressly refers to the “territorial nature” of patent rights, implying that importing countries should grant compulsory licenses where patents are present (unless the importing country is a least-developed country electing not to enforce patents), though the extent to which this step is necessary will depend on (1) whether a rule of regional exhaustion based on an export license is recognized, and (2) whether a region develops a joint compulsory licensing or recognition system.

204 Decision, supra note 3, para. 3.

205 In its implementation of the Decision, Canada has prescribed royalties depending on the level of development of the importing country ranging from less than 1 to 4%. Canadian Medicines Export Act, supra note 109, §21.01(1) & (2), to be supplemented by regulations. The regulations are in draft form; they apply the UN Human Development Programme’s Human Development Index to establish the development level. The level of remuneration under the Norwegian regulations is to be determined on a case–by–case basis. Norway Regulations, supra note 110, §108. The level of remuneration is likewise to be determined on a case–by–case basis under the EU Draft Regulation, supra note 111, Art. 8(9).

206 The first proposal by the chair of the TRIPS Council was based on an outline presented by U.S. Ambassador Deily, dated August 12, 2003. The central element of this proposal was the statement: “2. Purpose. That the solution is for humanitarian purposes, to be undertaken in good faith by governments, not as a part of industrial or commercial policy and hence not for commercial gain” (on file with author). Following objections by the developing country negotiators, the statement of good faith was revised to provide: “First, Members recognize that the system that will be established by the Decision should be used in good faith to protect public health and, without prejudice to paragraph 6 of the Decision, not be an instrument to pursue industrial or commercial policy objectives.” General Council Minutes, supra note 10, para. 29.

207 The initial U.S. proposal for the chairperson’s statement would have limited resort to the Decision to situations “not for commercial gain.” See id. This condition was rejected.

208 Under the Understanding on Rules and Procedures Governing the Settlement of Disputes, WTO Agreement, supra note 128, Annex 2, in The Legal Texts, supra note 2, at 354. The point at which an action under the Dispute Settlement Understanding can be commenced and prosecuted depends not on the notification, but on the jurisprudence of the Appellate Body regarding “ripeness”; that is, when an action by a member has become actionable.

209 Decision, supra note 3, para. 10. In a nonviolation nullification or impairment action, a member does not seek to challenge the conformity of another member’s measures or actions with the terms of the relevant agreement (e.g., GATT 1994), but contends that the measures or actions adversely affect the benefits it expected to receive based on a negotiated exchange of concessions. See, e.g., Abbott, Frederick M., TRIPS in Seattle: The Not–So–Surprising Failure and the Future of the TRIPS Agreement, 18 Berk.J. Int’l L. 165 (2000)Google Scholar; Abbott, Frederick M., Nonviolation Nullification or Impairment Actions Under The Trips Agreement and The Fifth Ministerial Conference: A Warning and Reminder (QUNO Occasional Paper No. 11, July 2003), available at <http://www.geneva.quno.info>>Google Scholar.

210 The chairperson’s statement provides: “Any Member may bring any matter related to the interpretation or implementation of the Decision, including issues related to diversion, to the TRIPS Council for expeditious review, with a view to taking appropriate action.” General Council Minutes, supra note 10, para. 29.

211 It can make a recommendation to the Ministerial Conference for a formal interpretation of the Agreement (WTO Agreement, supra note 128, Art. IX:2); it may make a report regarding a waiver (id., Art. IX:3); and “[i]t shall carry out such other responsibilities as assigned to it by the Members” (TRIPS Agreement, supra note 2, Art. 68).

212 The TRIPS Council makes recommendations by consensus. Rules of Procedure for Meetings of the Council for TRIPS, Rule 33, WTO Doc. IP/C/1 (1995). In default of consensus in the TRIPS Council, the matter is referred to the General Council, which ordinarily acts by consensus but may use the alternative voting rules of the WTO Agreement in the absence of consensus (although the General Council must act by consensus when so required by the applicable rule of the TRIPS Agreement). Only in extraordinary circumstances might the Ministerial Conference or the General Council act other than by consensus. For all practical purposes (under existing circumstances), decisions at the WTO are made only by consensus. Accord Vandoren & Van Eeckhaute, supra note 17, at 789–90.

213 A waiver is adopted at the WTO by decision of the members and does not require further ratification or acceptance. WTO Agreement, supra note 128, Art. IX:3–4. An amendment is initially decided upon collectively by the members, id., Art. X:1, but is thereafter subject to acceptance by each member in accordance with its national constitutional requirements, id., Art. X:3. An amendment is effective only for members that have accepted it. It was foreseeable that amending the TRIPS Agreement would be a time–consuming process, particularly if it took place outside the context of the completion of a trade negotiating “round.” It was also not entirely outside the realm of possibility that some members might never accept an amendment, even if they did not block its adoption at the WTO.

214 The target date of six months from the end of 2003 was set when the Decision was proposed for adoption on December 20, 2002. It was not adopted until August 30, 2003.

215 See regarding the initial extension WTO Set to Extend TRIPS Amendment Deadline by Nine Months, Inside U.S. Trade, June 18, 2004 Google Scholar. A WTO official provided details on the missed deadline following the TRIPS Council meeting of March 31, 2005.

216 In the course of negotiating the Decision, a question was raised whether a long–term waiver would require annual consensus renewal by the Ministerial Conference or the General Council. See Correa, supra note 13, at 30–31. The predominant weight of opinion, based on the express text of Article IX:4 of the WTO Agreement and on GATT/WTO practice was that no such renewal was required. A study by the secretariat implicitly confirmed this interpretation. Note by the Secretariat, Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: Information on Waivers, WTO Doc. IP/C/W/387 (Oct. 24, 2002) (noting that a substantial number of long–term waivers were in effect and that the “reviews under Article IX:4 that have taken place so far have been relatively brief and no delegations have questioned the waivers under review”).

217 Paragraphs 3–4 of Article IX of the WTO Agreement do not expressly address the voting requirement for termination of a continuing waiver. However, Article IX: 3 expresses a preference for action on waivers by consensus, and a secondary rule providing for a three–fourths majority. These rules would logically also apply to termination of a waiver. The secretariat’s note on waivers, supra note 216, indicated that the procedure for terminating a waiver has never been employed. During the negotiations, the question was raised whether a waiver might impose new obligations on a member. The view of this author and others was that a waiver could be conditioned on the fulfillment of obligations not otherwise stated in the provision subject to waiver. That is, the waiver is an instrument used to relieve parties of certain obligations, but there is no reason why the relief from obligations could not be subject to conditions.

218 The statement is not part of the Decision, and in that sense is not subject to the paragraph 11 direction on the preparation of an amendment based on the Decision. The statement may be eliminated, modified, or used again in more or less its present form.

219 The chairperson of the General Council stated: “Before adopting this Decision, I would like to place on the record this Statement which represents several key shared understandings of Members regarding the Decision to be taken and the way in which it will be interpreted and implemented.” General Council Minutes, supra note 10, para. 29; see, e.g., U.S., EU Criticize African TRIPS and Health Proposal, Inside U.S. Trade, Dec. 3, 2004 Google Scholar.

220 Communication from Nigeria on Behalf of the African Group, Implementation of Paragraph 11 of the 30 August 2003 Decision, WTO Doc. IP/C/W/437 (Dec. 10, 2004).

221 Including the waiver of compliance with Article 31(f) and (h), the requirement of product identification, and the obligation to provide effective legal means to prevent diversion, as well as special treatment for African regional arrangements.

222 E–mail briefing by WTO official (Mar. 21, 2005); U.S., EU Criticize African TRIPS and Health Proposal, supra note 219.

223 In the predecessor GATT and in today’s WTO, member countries have voted by consensus and, in accordance with customary practice, any one member could block a consensus. This customary rule is stated in Article IX: 1 of the WTO Agreement as the preferred method of WTO decision making. Article IX: 1 also provides voting rules that members may follow in the event they fail to reach a consensus; but despite this possibility, the WTO operates by consensus. Unlike the United Nations (with its Security Council), the WTO does not have an explicit decision–making mechanism that weights the trading power of its members.

224 By threatening to block a consensus at the Doha ministerial meeting, India was able to obtain substantial concessions regarding future negotiations on the so–called Singapore issues, but India is one of the leading developing countries in terms of trade power because of its large domestic market. See, e.g., Chairman’s Statement Casts Doubt on Final WTO Declaration, Inside U.S. Trade, Nov. 15, 2001 Google Scholar. By contrast, the Philippines briefly threatened to block a consensus on the Decision in August 2003 but quickly backed away after a diplomatic exchange with the United States.

225 See text supra at notes 95–101.

226 Because developing countries have relatively small delegations in Geneva, they cannot simultaneously focus on the same range of trade issues that the United States can with its much larger staff.

227 See Drahos, Peter, Developing Countries and International Intellectual Property Standards–Setting, 5 J. World Intell. Prop. 765 (2002)Google Scholar.

228 See Abbott, Frederick M., The Doha Declaration on The Trips Agreement and Public Health and The Contradictory Trend in Bilateral and Regional Free Trade Arrangements (QUNO Occasional Paper No. 14, Apr. 2004), available at <http://www.geneva.quno.info>>Google Scholar.

229 See Boseley, Sarah, France Accuses US of AIDS Blackmail, Guardian, July 14, 2004 Google Scholar (referring to a statement of President Jacques Chirac of France read at the XV International AIDS Conference in Bangkok); see also Lamy, Pascal, The TRIPs Agreement 10 Years On, Speech Before International Conference at Brussels (June 24, 2004), available at <http://europa.eu.int/comm/archives/commission_1999_2004/lamy/speeches_articles/spla234_en.htm>>Google Scholar; WTO Amb. Luzius Wasecha, Switzerland, Remarks, in UNCTAD/ICTSD Policy Dialogue entitled “Intellectual Property Rights Development 10 Years After Marrakech: Where Are We? Where Are We Heading?” (May 17, 2004)Google Scholar.

230 On NGOs, see note 234 infra. On the World Bank, see Fink, Carsten. & Reichenmiller, Patrick, Tightening Trips: The Intellectual Property Provisions of Recent us Free Trade Agreements (World Bank Trade Note No. 20, 2005)Google Scholar; World Bank, Global Economic Prospects 2005, ch. 5, at 98–110 Google Scholar.

231 Agreements with Australia, Chile, and Singapore are in force, while the Bahrain FTA, the Central American Free Trade Agreement (CAFTA), and Morocco FTA are signed but not yet in force. The USTR is negotiating a significant number of additional agreements, including with countries of the Andean Community, the Southern Africa Customs Union (SACU), and Thailand. For the agreements, see the Web site of the USTR, <http://www.ustr.gov>.

232 Concerns about U.S. FTAs were raised by this author in Abbott, supra note 228.

233 See PhRMA “Special 301” Submission to USTR, Appendix B, FTAs—Challenges and Opportunities (2004) [hereinafter PhRMA] (observing that FTA negotiations are a “second best” to multilateral agreements, but that “deliberations in the TRIPS Council call into question the current value of the WTO as a venue for improving the worldwide protection of intellectual property”).

234 The World Bank has compiled tables of intellectual–property–rights–related provisions in the various bilateral agreements. See Fink & Reichenmiller, supra note 230. A number of NGOs have also compiled tables showing the TRIPS–plus provisions adopted on an agreement–by–agreement basis. See, e.g., Oxfam Briefing Note, Undermining Access to Medicines: Comparison of Five Us FTAs (June 2004), available at <http://www.oxfamamerica.org/pdfs/fta_comparison.pdf>; CPTech, Table of Selected Provisions Related to Healthcare in the Free Trade Agreement Texts That Have Been Made Public [as of Apr. 6, 2005], available at <http://www.cptech.org/ip/health/trade> ; see also Msf Briefing Note, Access to Medicines at Risk Across the Globe: What To Watch out for in Free Trade Agreements With The United States (May 2004), available at <http://www.accessmedmsf.org>. An excellent analysis of the U.S.–Chile FTA is Pedro Roffe, Bilateral Agreements and a TRIPS–plus World: The Chile–USA Free Trade Agreement (Quaker International Affairs Programme, Ottawa, TRIPS Issues Paper No. 4, 2004).

235 Some agreements, for example, preclude the exclusion of plants and/or animals from patentability, eliminating the flexibility in Article 27.3(b) of the TRIPS Agreement to exclude such subject matter, and to provide only a sui generis form of plant variety protection. See, supra note 231, U.S.-Bahrain FTA, Art. 14.8(2); U.S.-Chile FTA, Art. 17.9(2) (best efforts); CAFTA, Art. 15.9(2) (best efforts); U.S.-Morocco FTA, Art. 15.9(2).

236 Granting patents for “new uses” is not permitted in a number of countries. See, e.g., Andean Community, Decision 486, Art. 21 (Sept. 14, 2000), available at <http://www.comunidadandina.org/ingles/treaties/dec/dec.htm>. In a typical case, a pharmaceutical compound known to be effective for treating one form of disease may be found to treat another disease, and a person seeks a patent on the “new use” (sometimes referred to as a “second medical indication” patent in that context). The TRIPS Agreement is silent on whether such patents should be granted, leaving countries with flexibility to decide the question. See, supra note 231, U.S.-Morocco FTA, Art. 15:9(2); U.S.-Australia FTA, Art. 15:9(1); U.S.-Bahrain FTA, Art. 14.8(2).

237 The United States provides a limited patent term extension based on the period during which a product undergoes regulatory review. Country practice varies on this matter, and it is not regulated by the TRIPS Agreement. See Canada—Pharmaceuticals, supra note 143 (describing U.S. system and deciding that patent term extension based on regulatory review is not required by TRIPS Agreement). The terms of the U.S. FTAs base the exception on unreasonable delays in granting patents. See, supra note 231, U.S.-Bahrain FTA, Art. 14.8(6); U.S.-Australia FTA, Art. 15.9(8); CAFTA, Art. 15.9(6); U.S.-Chile FTA, Art. 17.9(6); U.S.-Morocco FTA, Art. 15.9(7); U.S. Singapore FTA, Art. 16.7(7)–(8).

238 The Doha Declaration, supra note 1, para. 5(d), confirmed the right of each WTO member to adopt its own policy and rules with respect to parallel imports. Some FTAs preclude parallel importation of patented products, thereby eliminating this flexibility. See, supra note 231, U.S.-Morocco FTA, Art. 15.9(4); U .S.-Australia FTA, Art. 17.9(4).

239 Some FTAs limit the grounds for granting compulsory licenses, for example, to public noncommercial use, national emergencies, and circumstances of extreme urgency, or to remedy anticompetitive practices. See, supra note 231, U.S.-Australia FTA, Art. 17.9(7); U.S.-Singapore FTA, Art. 16.7(6).

240 See note 209 supra.

241 Article 39.3 of the TRIPS Agreement requires members to provide protection against “unfair commercial use” of confidential information with respect to “new chemical entities” submitted during the regulatory review process. The provisions in the FTAs establish strict “marketing exclusivity” periods following approval based on submitted data (initially five years), do away with the limitation to “new chemical entities,” and do not allow exceptions for fair or noncommercial uses, such as use by government authorities in public health systems. See, supra note 231, U.S.-Australia FTA, Art. 17.10(1); U.S.-Bahrain FTA, Art. 14.9(1); CAFTA, Art. 15.10(1); U.S.-Chile FTA, Art. 17.10(1); U.S.-Morocco FTA, Art. 15.10(1); U.S.-Singapore FTA, Art. 16.8(1).Some of the agreements allow the renewal or “evergreening” of marketing exclusivity periods. See supra, U .S.-Australia FTA, Art. 17.10(2); U.S.-Bahrain FTA, Art. 14.9(2); U.S.-Morocco FTA, Art. 15.10(2). These provisions taken together dramatically limit TRIPS flexibilities.

242 The United States is apparently concerned about countries that do or may accept registration in the United States or other countries, or approval by the WHO prequalification program, as sufficient evidence of the safety and efficacy of medicines, extending the basis of marketing exclusivity to actions taken outside the country where exclusion is sought.

243 See U.S.-Australia FTA, Art. 17.10(5); U.S.-Bahrain FTA, Art. 14.9(4); CAFTA, Art. 15.10(2); U.S.-Chile FTA, Art. 17.10(2); U.S.-Morocco FTA, Art. 15.10(4); U.S.-Singapore FTA, Art. 16.8(4), all supra note 231, and discussion in text at notes 248–250 infra.

244 U.S.-Australia FTA, supra note 231, Annex 2–C, Pharmaceuticals, para. 2(f).

245 This aspect of the U.S.-Australia FTA was the subject of intense political controversy in Australia. See Burton, Kate & Varghese, Jacob, The PBS and the Australia–US Free Trade Agreement (Austl. Parliamentary Library Research Dep’t, Research Note No. 3, 2004)Google Scholar; Drahos, Peter et al., The FTA and the PBS: A Submission to the Senate Select Committee on the US–Australia Free Trade Agreement (2004)Google Scholar. Prior to approving the Agreement, Parliament adopted amendments to Australian patent law intended to prevent pharmaceutical patent holders from abusing their right to challenge the registration of generic medicines. The United States has since objected to these amendments and is negotiating with Australia to modify its implementing legislation. See, e.g., Australia Poised to Pass U.S. FTA with Controversial Drug Amendments, Inside U.S. Trade, Aug. 13, 2004 Google Scholar.

246 FTA pharmaceutical regulatory provisions provide for the grant of marketing exclusivity, whether or not a medicine is on patent, based on the submission of regulatory data or evidence of prior marketing approval.

247 The introduction of generic pharmaceuticals results in lower prices, particularly as the number of generic competitors increases. See, e.g., Canada, Patented Medicines Price Review Board, Prices of the Top Selling Multiple Source Medicines in Canada (June 2003)Google Scholar.

248 See note 243 supra for a list of provisions. For a detailed analysis of these provisions in the CAFTA and the U.S.-Morocco FTA, see Abbott, supra note 228.

249 Country practices differ widely with respect to prerequisites for the distribution of medicines. The term “marketing approval” may refer to the technical process by which the regulatory authorities determine whether the product meets relevant quality, safety, and/or efficacy standards, while “registration” may refer to the more ministerial act of placing the medicine on a register of approved products. However, the terms are often used interchangeably.

250 Article 28 of the TRIPS Agreement generally allows the patent holder to prevent the manufacturing and sale of pharmaceutical products during the patent term. However, Article 31 authorizes the government to grant compulsory licenses to other persons to use the patented invention. The problem is that the marketing approval provisions of the FTAs expressly require the “consent” of the patent holder. It is not linked to the compulsory licensing process, and there is no recognition in the provisions that the government may allow the marketing of the product based on the compulsory license, that is, without the patent holder’s consent. Of course, the government could argue that a compulsory license “implies” that marketing approval of the medicine may also be given early effect, but the text does not say that and there is no reason to believe that patent holders would not seek to take advantage of the nonlinked provisions.

251 On Article 39.3 of the TRIPS Agreement, see note 241 supra. When the government grants a compulsory license under Article 31 of the TRIPS Agreement (and Decision), marketing approval and registration are not “unfair.”

252 The explanatory memorandum on the EU Draft Regulation, supra note 111, states with regard to Article 16:

As the licensee will not necessarily hold a medicinal products marketing authorisation within the EU for the product manufactured under a compulsory licence for export, the Regulation provides for licensees to ask for a scientific opinion from the European or national regulatory authorities if they should need this for export to the country concerned. Derogations from data protection and caducity rules are provided.

253 Many groups and individuals did so, including this author on a panel with a USTR representative at the 2004 annual meeting of the American Society of International Law. See Abbott, Frederick M., Remarks, 98 ASIL Proc. 95 (2004)Google Scholar.

254 See discussion infra text at notes 260–61.

255 Understanding Regarding Certain Public Health Measures, Aug. 5, 2004, CAFTA, supra note 231 (emphasis added). The relevant portion of the U.S.–Morocco FTA, supra note 231, Side Letter on Public Health, June 15, 2004, is stated in nearly identical language.

256 According to Merriam Webster’s Collegiate Dictionary (10th ed. 1993), a standard work on U.S. usage, the prepositional phrase “in particular” is defined as “specifically, in distinction from others” (emphasis added). Even if one were prepared to accept the U.S. view of paragraph 1 of the Doha Declaration, i.e., that it was intended to limit the scope of diseases, that paragraph uses the term “especially,” which connotes a degree of preference. The adverb “especially” is defined in the dictionary that the WTO Appellate Body would use in interpreting the Doha Declaration, 1 The New Shorter Oxford English Dictionary, supra note 105, as “[i]n an especial manner, to an especial degree; chiefly, more than in other cases” (emphasis added).

257 Since months of negotiations at the WTO were spent wrangling over the terms “referred to in” and “as recognized in,” seemingly small changes in terminology cannot be taken lightly.

258 Proposals to limit the Decision to situations of emergency and extreme urgency were rejected by developing country members at the multilateral level during the paragraph 6 negotiations. In February 2003, Amb. Pérez Motta proposed a statement of shared understandings that would have restricted the use of the solution to situations of national emergency, as follows: “Secondly, delegations have made it clear that they see the system that we are establishing under paragraph 6 of that Declaration as being essentially designed to address national emergencies or other circumstances of extreme urgency” (on file with author). This statement was initially presented to delegates of the African Group and was met with strong criticism from within and outside the African Group. See MSF, MSF Calls on WTO to Refuse ‘Paragraph 6’ Change, Open Letter to the Members of the WTO (Feb. 8,2003), available at <http://www.accessmed–msf.org>. By February 10, members of the African Group were prepared to reject the proposal, as were other members. Thus, the proposal was not mentioned at the General Council meeting on that date, WTO General Council, Minutes of Meeting on 10 Feb. 2003, Doc. WT/GC/M/78, paras. 36–38 (Mar. 7, 2003), or at the subsequent TRIPS Council meeting of February 18, 2003.

259 The letter referred to the parties’ common understanding in the side letter and asserted that “if circumstances ever arise in which a drug is produced under a compulsory license, and it is necessary to approve that drug to protect public health or effectively utilize the TRIPS/health solution, the data protection provisions in the FTA would not stand in the way.” Letter from John K. Veroneau to Representative Sander Levin (July 19, 2004), reprinted in Inside U.S. Trade, July 23, 2004.

260 See Fink & Reichenmiller, supra note 230, at 3, 10 nn.10, 11.

261 Id.

262 For a trend analysis with respect to the negotiation and conclusion of FTAs involving the United States, see WTO Secretariat, Trade Policy Review, United States, Doc. WT/TPR/S/126, at viii, para. 8; & at 20–27 (2003).

263 The author has had extensive conversations with developing country negotiators of these FTAs. There is no doubt that the provisions in question are adopted at the initiative and demand of the United States, and are viewed as a necessary concession by the developing country negotiators. These negotiators assume that the country will experience higher pharmaceutical payment outflows as a consequence.

264 This author has proposed a move toward objective assessment of the economic impact. See Abbott, Frederick M., Toward a New Era of Objective Assessment in the Field of TRIPS and Variable Geometry for the Preservation of Multilateralism, 8 J. Int’l Econ. L. 77 (2005)Google Scholar.

265 Of course, the United States has a leading voice at the International Monetary Fund and the World Bank, and in economic and financial matters more broadly, which gives it considerable implicit leverage in trade negotiations. But this implicit leverage operates in WTO negotiations as well as in bilateral negotiations.

266 This is less true for developed country delegates for whom producer lobbyists are a major presence at the WTO.

267 News services such as the BNA publications and Inside U.S. Trade provide information on negotiations in disparate forums but are read mainly by specialists.

268 See, e.g., Opposing the Inclusion in Future Free Trade Agreements of Provisions That Would Have the Effect of Restricting, Undermining, or Discouraging the Enactment or Implementation of Legislation Authorizing the Importation of Prescription Drugs, and for Other Purposes, H.R. 758, 108th Cong. (2004)Google Scholar; Home Resolution Opposes Future FTAs Against Drug Importation, World Trade Online, Sept. 14, 2004 Google Scholar.

269 For example, in a question-and-answer discussion it was asked whether the U.S.–Australia FTA prevents Congress from passing legislation on drug reimportation. In its reply the USTR stated that the “FTA reflects current law in the United States. Nothing in this FTA or any other trade agreement prevents Congress from changing U.S. law in the future. Even if a dispute settlement panel found the U.S. acted inconsistently with the FTA, it could not require Congress to amend the law.” USTR Fact Sheet, U.S-Australia Free Trade Agreement, Questions and Answers About Pharmaceuticals (July 8, 2004), available at <http://www.ustr.gov>.

270 At the XV International AIDS Conference, supra note 56, six countries (Brazil, China, Nigeria, Russia, Thailand, and Ukraine) signed an agreement to increase cooperation in developing and producing generic drugs. India and South Africa are considering joining this group. Brazil to Coordinate Six–Country Anti–AIDS Network, BBC Monitoring, July 16, 2004, available in LEXIS, News Library, Allnews File. According to this report, “The purpose is to form a strong alliance to withstand the interests of major laboratories,” and it will be supported by the Ford Foundation.

271 See OECD, supra note 52.

272 See PhRMA, supra note 233, at i (Introduction), 2, 7–8 (Canada), 34 (New Zealand), 57–58 (Italy), 62 (Egypt), 68 (India), 84 (Saudi Arabia), 94 (Brazil), 99 (Ecuador), 104–05 (Venezuela), 121 (Russia), 143 (CAFTA, regarding Honduras, Nicaragua, and Panama), & Appendix A, Foreign Government Price Controls Are a Major Trade Issue (referring to other countries, including Australia, Japan, and Taiwan).

273 See supra text at note 244.

274 See PhRMA, supra note 233, at 2, 7–8. Canada was also criticized for its refusal to accept PhRMA’s views on data protection and marketing exclusivity, and it is in the process of amending its law.

275 The European Union has not negotiated data protection and marketing exclusivity rules in its bilateral trade agreements with developing countries. It does, however, maintain strict internal data protection and marketing exclusivity rules, and it requires adherence to those rules as a condition to EU accession.

276 It is not clear that companies such as General Motors have strong motivation to support Pfizer’s position on strengthening protection for originator medicines. See, e.g., Hakim, Danny, Carmakers Face Huge Retiree Health Care Costs, N.Y. Times, Sept. 15, 2004, at A1 Google Scholar (discussing serious financial problems facing major automobile producers in paying for prescription drugs for employees and retirees).

277 See Abbott, supra note 264.

278 See, e.g., Kaiser Health Poll Report, Views on Prescription Drugs and the Pharmaceutical Industry (Jan.–Feb. 2005), at <http://www.kff.org/healthpollreport/feb_2005/>>Google Scholar.

279 See, e.g., Belluck, Pam, Vermont Will Sue U.S. for the Right to Import Drugs, N.Y. Times, Aug. 11, 2004, at A13 Google Scholar; Belluck, Pam, Maine and One of Its Tribes Look to Buy Canadian Drugs, N.Y. Times, Oct. 1, 2004, at A12 Google Scholar.

280 Harris, Gardiner, F.D.A. Failing in Drug Safety, Official Asserts, N.Y. Times, Nov. 19, 2004, at A1 Google Scholar; Nesmith, Jeff, FDA Hit on Vaccine Oversight, Atlanta J.-Const., Nov. 18, 2004, at 1A Google Scholar.

281 Importantly, however, the United States denies self–executing effect for the FTAs. See, e.g., United States– Morocco Free Trade Agreement Implementation Act, S. 2677, 108th Cong., § 102 (2004)Google Scholar.

282 Doha Declaration, supra note 1, para. 4, quoted in text following note 90 supra. Discussion in the academic literature regarding the place of human rights norms in the WTO legal system is largely predicated on the coexistence of rules developed in different fora and contexts. See Marceau, Gabrielle, WTO Dispute Settlement and Hunan Rights, in International Trade and Human Rights: Foundations and Conceptual Issues (World Trade Forum Vol. 5, Abbott, Frederick M., Christine, Breining–Kaufmann, & Cottier, Thomas eds., forthcoming 2005)Google Scholar.

283 It has been suggested that the statement in the Doha Declaration does not import a right to health into the WTO legal system and that in any case the nature of the “right to health” is complex and not well–settled. As to the first point, the text of the Doha Declaration speaks for itself, and the Appellate Body continually stresses that the words of WTO texts are there for a purpose. As to the second point, neither of the trade terms “national treatment” and “most–favored–nation treatment” is self–defining, but that has not prevented the WTO Appellate Body from giving them meaning.

284 The UN Committee on Economic, Social and Cultural Rights warned Ecuador about the potential negative impact of the CAFTA on the right to health. 3D Press Release, UN Committee Warns Ecuador that US-Andean FFA Must Not Undermine Human Rights (May 18, 2004). The UN Committee on the Rights of the Child issued a warning in reference to CAFTA negotiations including the United States and El Salvador. 3D Press Release, UN Committee Warns El Salvador That IP Rights in CAFTA Must Not Undermine Children’s Rights (June 2004). Both press releases are available online at <http://www.3dthree.org>.

285 The relationship between WTO rules and the rules of regional arrangements, and the problems raised by multiple dispute settlement forums are complex. At this stage, attention is drawn to the possibility for overlap and conflict, while addressing those matters is left for future inquiry. See generally Abbott, Frederick M., The North American Integration Regime and Its Implications for the World Trading System, in The Eu, the WTO and the Nafta 170 (9 Collected Courses of the Academy of European Law, bk. 1, Weiler, J. H. H. ed., 2000)Google Scholar.

286 The WTO Appellate Body has referred to the most–favored–nation (MFN) principle (Art. 4) as a fundamental element of TRIPS, although prior to the TRIPS Agreement MFN was not a principle of the international intellectual property system. On a historical basis, there is little international precedent for applying MFN to intellectual property rights. A considerable amount of GATT/WTO and EU jurisprudence concerns the use of facially neutral measures as disguised trade barriers. It may at least be worth exploring whether some developing country generic producers may be suffering de facto MFN discrimination by importing members of FTAs as a consequence of the new FTA rules, which may effectively grant preferences to originator companies principally based in a few WTO members.

287 “Transfer payments” can take many different forms, including the establishment of health insurance arrangements with redistributive effect, and grants for financing the purchase of medicines, as in the case of the Global Fund.