Philippe Cullet

IELRC Briefing Paper 2002-1


The 2001 ministerial conference of the World Trade Organization (WTO) adopted a declaration concerning the question of access to medicines in the context of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This constitutes a response to widespread debates concerning the impacts of the TRIPS Agreement on access to drugs in developing countries.

The Declaration on the TRIPS Agreement and Public Health (Doha Declaration) provides responses to some specific concerns concerning the implementation of intellectual property rights in the field of health[1]. However, it only constitutes a partial answer to the question of access to drugs since it does not address the relevance and impacts of the introduction of product patents in the health sector.


Patent and medecines

Patents constitute an incentive for the development of the private sector pharmaceutical industry. The rationale for granting exclusive rights on patented medicines is that while the development of new drugs is a costly process, it is relatively easy to copy an existing drug. Despite the private industry’s plea for patent protection, a number of developed and developing countries traditionally put restrictions on the patentability of drugs on public policy grounds. The Patents Act, 1970, for instance, introduced restrictions on product patents for medicines to limit commercialisation in the health sector. The adoption of the TRIPS agreement is forcing countries that had patentability restrictions like India to fundamentally alter their patent laws if they want to be in compliance with their WTO-related legal obligations.

Patents undoubtedly play a major role in the health sector. Firstly, they constitute a pre-condition for the involvement of the private sector in the development and production of new medicines. Secondly, patents offer exclusive rights to patent holders who benefit from a monopoly situation in the market. This implies that companies selling patented drugs have an important say in determining their price. The result from the point of view of individual patients is that patented drugs are usually significantly more expensive than generic drugs (drugs not protected by patents). The central role of patents does not imply that they constitute the only determinant of patients’ access to drugs. In fact, there is a host of other factors that also play a significant role in shaping people’s access to medicines. These include issues linked to the distribution and dispensing of drugs as well as legal and policy instruments that the government can use to regulate prices, such as the Drug Price Control Order.

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As far as innovation is concerned, it is clear that the existence of patents in developed countries has not led pharmaceutical companies to develop drugs for developing country specific diseases. As noted by the World Health Organization, only 11 of the 1223 new chemical entities developed between 1975 and 1996 were for the treatment of tropical diseases[3]. While the generalisation of patent protection in developing countries has the potential to provide stronger incentives to pharmaceutical companies to develop drugs focused on developing country diseases, other factors, including the lack of purchasing power of the poor, are likely to ensure that the increasingly important role of the private sector in drug development will not lead to the development of drugs for diseases mostly affecting the poor in developing countries.

The positive impacts of a restrictive patent policy are clearly seen in the case of India. While drug prices in India were among the highest in the world in the first decades after independence, they are now among the lowest in the world[4]. Even though access to drugs is far from universal, the patents regime has definitely contributed to notable improvements in access to medicines. Further, the patent regime has also constituted one of the important triggers fostering the fast development of a domestic pharmaceutical industry which now provides 70% of bulk drugs and meets nearly all the demand for formulations[5].


TRIPS and medicines

The main vehicle for the introduction of patents on pharmaceuticals in developing countries is TRIPS. The agreement is one of the treaties administered by the WTO and is therefore meant to generally provide enhanced opportunities for international trade. Even though TRIPS mainly strengthens the position of patent holders who happen to be overwhelmingly in developed countries, it also provides some exclusions and qualifications. The objective clause of TRIPS provides, for instance, that intellectual property rights should ‘contribute to the promotion of technological innovation and to the transfer and dissemination of technology’[6]. TRIPS also provides that states can restrict patentability, for instance, to protect human health. They can also subject the use of the patent to specific conditions, for instance, in cases where a drug is not available in sufficient quantities in the country (compulsory licensing).

From the point of view of patients and most developing countries, the most important issue concerns the scope of patentability in the health sector, or in other words the existence of process and product patents on medicines. This is, however, an issue which has not attracted significant attention in recent times. Efforts have rather been directed towards limiting the negative impacts of existing patents in terms of access to medicines, for instance, in the case of HIV/AIDS drugs. This is why arguments have focused on compulsory licensing, differential pricing and parallel importation. These debates do not address the fundamental question of patentability in the health sector but examine specific approaches that can be used to make sure patents are implemented in a broadly more ‘equitable’ manner.

Several countries have already attempted to use some of the exceptions and qualifications found in TRIPS to foster public health goals. In at least two cases, national attempts at taking into consideration both patent holder interests and public health concerns and the human right to health have led to significant legal disputes. South Africa was the first country to find itself in the eye of a health-related storm after a dramatic surge in HIV/AIDS infection rates led the government to pass the 1997 Medicines and Related Substances Control Amendment Act.

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The Act also entitles the government to authorise parallel imports from other countries where the same medicine is also manufactured.

The clear assertion of a possibility to override patent rights to foster the affordability and availability of medicines in section 15C.a constitutes a significant derogation to the TRIPS regime. It was consequently vigorously challenged by a group of pharmaceutical companies[8]. The petition sought to have Section 15C declared unconstitutional because it gave too much latitude to the government to determine the circumstances under which rights under the patents act can be curtailed and because it authorised the government to determine the extent to which rights conferred under the patents act should apply. The pharmaceutical companies also argued that Section 15C was tantamount to depriving patent owners of their rights and that it violated the non-discrimination clause of Article 27 TRIPS. The petition was eventually abandoned in April 2001 in the face of strong public opposition. The joint statement issued by the parties on this occasion indicates that the government will undertake to honour its TRIPS obligations while pharmaceutical companies reaffirm that South Africa can adopt measures necessary to protect public health and broaden access to medicines[9].

Brazil also got embroiled in a dispute with the United States concerning its compulsory licensing regime [10]. In particular, the US objected to a provision providing that unless ‘economic unfeasibility’ can be demonstrated, the inventor has a duty to manufacture the product in Brazil and can be subjected to compulsory licensing if the invention is not worked. The US contended that this was in contradiction with the TRIPS requirement that the patent holder can choose whether to import or locally manufacture. The WTO panel was withdrawn by the US in June 2001 on the understanding that Brazil would hold talks with the US if it ever wanted to use the compulsory licensing provisions against a US company[11].


The Doha Declaration

The multiple controversies concerning access to drugs, in particular in the context of the HIV/AIDS epidemics put increasing pressure on the WTO to address the issue even before considering the possibility of an amendment or revision of the TRIPS agreement. This eventually led the 2001 Ministerial conference to specifically address the question of the place of health in the TRIPS agreement. The result of the WTO deliberations is a ministerial declaration adopted at the end of the Doha meeting. This Declaration does not constitute an amendment of TRIPS and only seeks to shed light on acceptable interpretations of the treaty. It constitutes a first step towards the recognition that intellectual property rights issues cannot be discussed in isolation from health concerns.

The Declaration’s main importance stems from its recognition that the existence of patent rights in the health sector does not stop states from taking measures to protect public health. More specifically, it affirms that TRIPS 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'[12]. The Declaration is important for developing countries insofar as it strengthens the position of countries that want to take advantage of the existing flexibility within TRIPS. The Declaration does not open new avenues within TRIPS but confirms the legitimacy of measures seeking to use to the largest extent possible the in-built flexibility found in TRIPS. In other words, it constitutes a confirmation of the position of countries like South Africa and Brazil which sought to go beyond a narrow interpretation of TRIPS in their search for ways to tackle their rampant HIV/AIDS crisis. Further, it provides a basis for arguments in case of a dispute at the level of the WTO dispute settlement mechanism[13]. Finally, it grants least developed countries a further ten years to implement their patent obligations with regard to medicines.

While the Doha Declaration has contributed to softening the tone of international debates concerning access to medicines in the context of TRIPS, it stops short of addressing the fundamental question of the relevance and need for patents on drugs in developing countries and in particular in least developed countries. Beyond the unresolved question of patentability in the health sector, the Declaration also fails to provide answers to more practical questions. This concerns, for instance, the case of the prohibition for a country like India to compulsorily license a drug mainly to export it to other countries. This has been contentious because the possibility to compulsorily license a patented drug is only available in situations where a country has a manufacturing basis of its own. If exports were not permitted in this context, this would mean that most sub-Saharan African countries would not be able to take advantage of alternative sources of medicines. This points out to one of the major challenges that all developing countries will face in the future. If existing manufacturing capacity in countries like India was to substantially reduce, this would have an impact not only for India but also for a number of other countries which do not have the capacity to manufacture drugs and would therefore be totally dependent on supplies from developed country manufacturers. The Doha Declaration has not tackled this problem but at least required the TRIPS Council to provide a solution to this problem by the end of 2002. This constitutes one of the important on-going debates in the context of patents in the health sector.


Behyond Doha

The Doha Declaration constitutes a small step towards the recognition of the special situation of health in the context of patent laws and treaties. However, the Declaration in itself is unlikely to make much difference unless it is followed by further action. A lot depends on the way current and future legislative action in developing countries will be judged. As far as existing legislation is concerned, Brazil is again an interesting case. Alongside the patents act which was challenged by the US in WTO, Brazil also enacted a decree on compulsory licensing[14]. This decree established rules concerning the granting of compulsory licenses in cases of national emergency and public interest. In the post-Doha scenario, it is accepted that public health crises can be a ground for compulsory licensing. However, the Brazilian decree goes much further than that and provides that compulsory licenses can be granted in cases where ‘public interest’ is concerned. This is deemed to include public health, nutrition, the protection of the environment, and elements of primordial importance for technological, social or economic development. It remains to be seen whether Brazil effectively implements these sweeping provisions. Similarly, it will be important to see whether the Patents (Second Amendment) Bill, 1999 is adopted without being challenged. The Bill generally makes significant concessions to put the Patents Act in conformity with TRIPS. However, bodies like the Pharmaceutical Research and Manufacturers of America (PhRMA) have recently commented very negatively on the Bill. This seems to indicate that developing countries are likely to come under renewed pressure in the future to closely abide by their TRIPS obligations, with the exceptions of situations like the HIV/AIDS crisis which are now generally recognised as warranting special measures. It is unlikely that the Doha Declaration will on its own lead to a broader debate on patentability in the health sector and access to drugs.

  1. WTO, Declaration on the TRIPS Agreement and Public Health, Ministerial Conference – Fourth Session, WTO Doc. WT/MIN(01)/DEC/2 (2001) [Doha Declaration]. Also available at:
  2. UNICEF-UNAIDS-WHO/HTP/MSF, Sources and Prices of Selected Drugs and Diagnostics for People Living with HIV/AIDS (2001).
  3. World Health Organization, Globalization, TRIPS and Access to Pharmaceuticals (WHO Policy Perspectives on Medicines No. 3, 2001).
  4. See, e.g. , Shekhar Chaudhri, ‘The Evolution of the Indian Pharmaceutical Industry’, in Greg Felker et al eds, The Pharmaceutical Industry in India and Hungary – Policies, Institutions, and Technological Development 6 (Washington, DC: World Bank, 1997).
  5. Department of Chemicals and Petrochemicals – Government of India, Annual Report 1999-2000.
  6. Article 7, Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakech, 15 Apr. 1994 (emphasis added). Available at:
  7. Section 15C.a of the Medicines and Related Substances Control Amendment Act, 1997 (Republic of South Africa, Government Gazette, 12 Dec. 1997).
  8. The Pharmaceutical Manufacturers' Association of South Africa et al. vs The President of the Republic of South Africa et al., Notice of Motion, High Court of South Africa (Transvaal Provincial Division), 18 Feb. 1998.
  9. The Pharmaceutical Manufacturers' Association of South Africa et al. vs The President of the Republic of South Africa et al., Joint Statement of Understanding (2001).
  10. Article 68, Brazil, Industrial Property Law, Law Nº 9.279 of 14 May 1996.
  11. See Government of Brazil, Press Communiqué, 25 June 2001.
  12. Para 4 of the Doha Declaration, supra note 1.
  13. Cf. Paul Vandoren, ‘Médicaments sans Frontières? Clarification of the Relationship between TRIPS and Public Health Resulting from the WTO Doha Ministerial Declaration’, 5 Journal World Intellectual Property Rights 4 (2002).
  14. Brazil: Presidential Decree on Compulsory Licensing, Decree No. 3,201, 6 Oct. 1999.