WTO, TRIPS and Pharmaceutical Demand Growth and Safety Issues

Global trade in pharmaceuticals

The World Intellectual Property Organization (WIPO) and World Health Organization (WHO) met recently to seek amendment to the WTO's  Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which governs WTO Members. The organizations seek to address issues such as how to maintain the market for generic medicines but stop the flow of counterfeit medicines. The former is fake medicine that may contain the wrong or no active ingredients or may even be contaminated. This issue is being addressed as the H1N1 Swine Flu confirmed cases rise to 8,451 globally, with a death toll of 72, according to the most recent WHO tally.

On April 29, the WHO raised its pandemic alert to 5 on a 6-level scale. As rich nations lock in flu vaccine and poor nations fret on being left out in a antiviral vaccine production, the problem of counterfeit medicines may certainly become a very real one if a global shortage of antiviral medicines face increased market demand among nations in both small and large economies.

One WTO problem is seen under TRIPS' Article 31(f), which requires that 50 percent or more of sales of compulsorily licensed products be in the domestic market. This means, for example, that a compulsory licensed product exporter, such as a generic pharmaceutical manufacturer from the U.S.A., can not export an amount that is more than its domestic sales of its product. At least one of the underlying reasons in this rule is to curtail large economy manufacturers from developing export monopolies. However, for smaller economies, who have little choice but to rely on imports of manufactured medicines, this Article 31(f) import inhibition needed addressing.

In 2003, the so called "Paragraph Six Solution" in the Doha Declaration promised to resolve this TRIPS export problem. Since that time, no developing nation has used it, which is either telling of its complexity or its flaw in being the needed solution. Hopefully the current H1N1 Swine flu health problem will not grow to a proportion that would test the effectiveness of the so-called "Paragraph Six Solution".

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