Doha Declaration

Trips Agreement

The TRIPS Agreement, which went into effect for WTO members in 1995, gave the pharmaceutical companies the right to protect their drug inventions through patents valid for 20 years. With the adoption of TRIPS, WTO member states could not grant individuals or companies permission to produce patented medicines without obtaining licenses from the patent holders. The agreement led to considerable price increases for some medicines in developing countries. This had significant impact on the poor, who often had to make out-of-pocket payments to purchase medicines. However, the TRIPS Agreement contained some “flexibilities” to allow WTO members to pursue their national public health policies.

First, the agreement originally allowed compulsory licensing, enabling governments to allow individuals or companies to produce a patented product without the permission of the patent holder. This provision enabled the production of cheaper but interchangeable versions of patented drugs (known as generic drugs).

The second area of flexibility, parallel importing, refers to the importation of lower-priced drugs sold in another country. For example, suppose that a brand name (nongeneric) drug is sold for $200 in country A, and the same drug is sold for $5 in country B. Parallel importing is the importing of the brand name drug from country B by country A without the consent of the patent holder.

This issue attracted international attention when South Africa’s postapartheid government proposed an amendment to the South African [Page 383]Medicines and Related Substances Control Act in 1997. Faced with a health crisis and having the largest absolute number of people with HIV/AIDS in the world, the government looked to reduce drug prices.

Reaction to Proposed Amendment

A proposed TRIPS amendment sought to make possible both parallel importing and compulsory licensing. The amendment, however, met with strong opposition from the United States. In addition, 40 pharmaceutical companies from around the world challenged the amendment, arguing it violated the TRIPS Agreement.

This move by the pharmaceutical industry and Western governments led to a strong international backlash by civil society groups around the world. They accused the United States and drug companies of turning a blind eye to the plight of poor populations. Critics maintained that “diseases of the poor,” such as HIV/AIDS, tuberculosis, and malaria, were leading to unnecessary deaths because of the lack of access to medicines. The pharmaceutical companies, on the other hand, argued that high prices were necessary to fund research for life-saving medicines. By the end of 1999, the U.S. government declared that it changed its intellectual property rights policy, and in 2001 the companies dropped their opposition to the amendment.

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