EU Parliament backs moves to simplify exports of generic drugs to poorer countries

The European Union must do everything it can to enable the world's poorest people to have access to medicines. This is the view of Parliament's Trade Committee, which on 12 July adopted a report by Johan VAN HECKE (ALDE, BE) on a draft regulation on compulsory licensing for the export of generic medicines to developing countries.

What problem is this legislation trying to tackle? Under the World Trade Organisation's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), countries with major public health problems can issue "compulsory licences" for the manufacture of patent-protected drugs. But most developing countries do not have a pharmaceuticals industry to produce the generic drugs. On 14 November 2001, a declaration was adopted at Doha, during the WTO ministerial conference, to make the application of TRIPS more flexible not only for developing countries without the manufacturing capability but also for exporting countries. A decision of the WTO General Council of 30 August 2003 lays down the conditions under which countries without manufacturing capabilities can import generics that are still patent-protected. It also allows manufacturing countries to export drugs under a compulsory licence even where these drugs are patent-protected on their territory.

The European Commission's draft regulation is intended to transpose the decision of 30 August 2003 into Community law. It lays down conditions for the granting of compulsory licences for the manufacture in Europe of generic drugs intended for export to developing countries. The text is based on a multilateral decision, so the EU institutions have only limited freedom for manoeuvre as it was not easy to agree a compromise within the WTO and, in Mr Van Hecke's words, "we must not open a Pandora's box". Nevertheless MEPs adopted amendments to the Commission's proposal to bring it more into line with the development goals it is seeking to achieve.

MEPs propose final touches to the legislation

The EP Trade Committee firstly wants to broaden the scope of the regulation so that all developing countries can benefit from exports under compulsory licences. Under the Commission proposal, only WTO members can apply. MEPs believe the WTO decision does not exclude a widening of the regulation's scope and they cite examples of similar legislation adopted in Norway, Canada and the Netherlands.

To be effective, the machinery for issuing licences must not be too complicated or cumbersome. MEPs therefore wish to simplify the legislation as much as possible. The Commission lays down numerous administrative requirements to ensure that compulsory licences are not misused. The Trade Committee thinks these are unnecessary as they are not stipulated in the WTO decision and would simply deter potential applicants from using the system. MEPs also want to tighten up some provisions of the regulation. Before applying for a compulsory licence, an applicant must ask the patent holder to sell him the products at a reasonable price. MEPs say the patent holder should have 30 days to reply and not "a reasonable period of time", as proposed by the Commission. Once this period has elapsed, the compulsory licence application should be granted. This waiting period would not apply in the event of "situations of national emergency....or cases of public non-commercial use".

However, the licence holder must pay "adequate remuneration" to the patent holder. MEPs insist that "humanitarian and non-commercial reasons underlying the issue of the licence" must be taken into account. To remove any uncertainty as to the amount of the remuneration, the Trade Committee calls on the Commission to lay down guidelines.

It is often NGOs and United Nations bodies in the field that distribute the drugs. MEPs therefore want to add them to the list of those who can request imports of pharmaceutical products, on the same footing as representatives of the countries concerned.

The Trade Committee wants it to be possible for the regulation to be brought into line with changes to TRIPS that are already in the pipeline or for it to be changed to take account of failings in its application. It thus proposes that the Commission present a report every three years to Parliament and the Council on the application of the regulation.

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• EU welcomes permanent WTO solution on generic medicines (6/12/2005)