jake carberry

a blog about all things economics, politics and law

The WTO, TRIPs and the Doha Declaration: The Access to Medicines Controversy

The approach of the World Trade Organisation towards intellectual property has come under criticism for a number of reasons, but one area of particular controversy has been the ostensible restriction of access to affordable medicines for developing countries. In this area, the WTO’s approach has been viewed as morally questionable, given the influence exerted by private industries – the pharmaceutical industry in this case – over the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In this instance, pharmaceutical firms acting through the US trade representative successfully lobbied to include a number of “objectionable” and self-serving features into the Agreement.(1)

This included extension of patents to twenty years, “a period so long that few economists of repute … would call it efficient,” as well as limiting the ability of “poorer countries… to import generic drugs from other developing countries.”(2) As a result, the cost of purchasing and distributing medicines sharply increased, and the poorest, developing countries were no longer able to import cheaper drugs, forced instead to purchase patented medicines from developed countries. These patented drugs became, for many, simply unaffordable: as Gerhart states, the payments for patented drugs that TRIPS required severely hampered “the ability of countries to address the health needs of patients.”(3)

To alleviate these problems, the Doha Declaration was launched in 2001, aiming to address the dissatisfaction felt by developing countries regarding the impact of the TRIPS Agreement on access to medicine.(4) Not only did it “…delay the implementation of patent system provisions for pharmaceutical products for least developed countries until 2016”, but it also officially committed WTO members to interpret TRIPS in a manner consistent with WTO principles, and utilise the flexibility inherent within TRIPS to “support public health and promote access to medicines for all.” (5) The Declaration stated that each member had the “right to determine what constitutes a national emergency”, including emergencies of public health, and reiterated that all members were able to grant compulsory licenses if necessary. Compulsory licenses allow governments to “…authorize the use or production of a patented item by a domestic party other than a patent holder,” and their extremely limited usage under TRIPS makes their inclusion in Doha all the more noteworthy.(6)

Despite this, however, the issue of access to affordable medicines in developing countries persists, leading some to suggest that this amendment alone is far from sufficient. As Ferguson notes, although Doha introduced compulsory licensing, this system has by no means been utilised to its full extent, and use of these provisions remains rare. As a result the effect on the availability of medicines has been “relatively modest”(7) – a WHO report from 2005 claimed that developing countries were not utilising the flexibilities within the TRIPS Agreement anywhere near as far as the Doha Declaration permitted.(8) So, while the Doha Declaration may have been a positive advancement, ultimately it has not proven as significant as was hoped.

(1) Jagdish Bhagwati, In Defense of Globalisation, (Oxford University Press, 2007) p.184
(2) Ibid. p184
(3) Peter M Gerhart, ‘The Tragedy of Trips’, Michigan State Law Review, (2007) p.183, Available online at:http://www.msulawreview.org/PDFS/2007/1/Gerhart.pdf
(4) World Health Organisation Website, ‘The Doha Declaration on the TRIPS Agreement and Public Health’, Available online at:http://www.who.int/medicines/areas/policy/ doha_declaration/en/index.html
(5) Ian F Ferguson, ‘The WTO, Intellectual Property Rights, and the Access to Medicines Controversy’, CRS Report for Congress, (2006), Available online at: http://www.fas.org/sgp/crs/misc/RL33750.pdf
(6) Ibid.
(7) Ibid.
(8) Sisule F Musungu, Cecilia Oh, ‘The Use of Flexibilities in TRIPS by Developing Countries: Can they Promote Access to Medicines?’, WHO Report, Commission of Intellectual Property Rights, Innovation and Public Health, (2005), Available online at:http://www.who.int/intellectualproperty/studies/TRIPSFLEXI.pdf

The Complex Nature of the Global Intellectual Property System

The World Trade Organisation (WTO) agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was successfully negotiated at the end of the Uruguay Round of The General Agreement on Tariffs and Trade (GATT) in 1994. For many it signalled the beginning of a new global system of intellectual property rights; a regime wherein the WTO and the TRIPS Agreement would be of central importance. Scholars and lawmakers alike believed that the WTO would displace the World Intellectual Property Organisation (WIPO) and become the “…dominant institution of international intellectual property law.”(1)

This, however, has not proven the case. Rather than a simple question of WTO or WIPO, the current regime of intellectual property rights is far more convoluted and complex in nature. The system is becoming increasingly dispersed and decentralised and many new institutions or actors have emerged. As Dinwoodie states, these include “…national courts developing for the first time a private international law of intellectual property”, “…nongovernmental organizations (NGOs)”, “…new actors whose authority of remit are not linked to any particular nation-state”, “…existing international institutions that now find their work impacted by intellectual property law” and “…technology that operates without regard to territory”.(2)

It can thus be seen that the current regime of intellectual property has not developed as conveniently as many had hoped it would. While somewhat of an inconvenient truth, it is important to assess the current system as objectively as possible. A complex, decentralised system of intellectual property protection with many different actors and institutions may well offer the perfect solution to what has proven a very stubborn problem.(3) This is supported by Dinwoodie who highlights a number of key advantages of a decentralised system, for example, a national court, wherein private international law on intellectual property has developed, and if sufficiently transparent, may prove far more dynamic and responsive than the treaty process of the WTO or the WIPO. It is also “…less subject to the political demands that historically have burdened the treaty process and that continue to limit its efficacy.”(4) I would go one step further than Dinwoodie in this regard and suggest that given that power is not evenly distributed amongst WTO or WIPO members, a key advantage of a decentralized system of intellectual property is that these new non-treaty actors and institutions may reflect the interests of the developing countries far more closely than the WTO, wherein developed countries have been able to exert a great deal of influence.

The emergence of these new actors within the realm of international intellectual property has given rise to a number of interesting and exciting opportunities however there are also a number of concerns and disadvantages such as the problem of transparency and monitoring. While the WTO has many flaws, given the nature of the treaty system, it can be held accountable if required.(5) It is far more difficult to ensure a sufficient level of transparency in a complex, decentralized system with many new actors and institutions.

(1) Graeme Dinwoodie, “The International Intellectual Property Law System: New Actors, New Institutions, New Sources”, 10 Marq. Intell. Prop. L. Rev. 205 (2006)
(2) ibid.
(3) Peter M Gerhart, ‘The Tragedy of Trips’, Michigan State Law Review, (2007) 183-184, Available online at:http://www.msulawreview.org/PDFS/2007/1/Gerhart.pdf
(4) Dinwoodie, (2006)
(5) WTO Website, ‘WTO gets high marks for accountability, transparency’, Available online at:http://www.wto.org/english/news_e/news03_e/global_account_report_11feb03_e.htm

Has The World Trade Organization Outlived Itself?

The 1995 Marrakesh Agreement saw the official introduction of the World Trade Organisation (WTO), replacing the 1948 General Agreement on Tariffs and Trade (GATT) as the key organisation responsible for promoting the liberalisation of international trade, and for providing a framework wherein its members can negotiate and formalize multilateral trade agreements and resolve trade disputes.(1) Since its inception, the WTO has been no stranger to controversy, particularly within the area of intellectual property. It is thus of great significance to explore the WTO’s approach to intellectual property rights, with particular reference to the WTO agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This entry will therefore illustrate the extent to which the TRIPS Agreement is in direct conflict with WTO development policy.

The 1994 TRIPS Agreement, negotiated at the end of the Uruguay Round of the GATT, remains the single greatest advancement in universally applicable intellectual property rights on a global scale to date. It was designed to ensure a minimum level of intellectual property protection within all WTO member states: copyrights, trademarks, geographic indications, industrial designs, patents, integrated circuits layout designs, undisclosed information and trade secrets are all protected under the TRIPS Agreement.(2) The WTO claimed that the reasoning behind TRIPS was that varying standards of IP rights amongst its members had led to a “…growing source of tension in international economic relations” and thus, regulation was necessary in order to “…cope with these tensions.”(3) Advocates of TRIPS emphasise the importance of the economic theory underpinning the agreement; that intellectual property rights are necessary to create and protect sufficient incentives for producers. As outlined by the WTO in Article 7 of the agreement, the protection of IP rights is required to encourage innovation and aid the dissemination of technology and knowledge.(4)

This argument seems to be built upon sound economic principles. However, an emerging school of thought led by influential economists such as Joseph Stiglitz, suggests that the current global intellectual property regime may actually “impede both innovation and dissemination”, and that reforms, such as placing greater emphasis on other means of stimulating innovation, are necessary.(5) Moreover, the seemingly incompatible relationship between the current IP system and WTO development policy underlines the severity of the problem; inherent within the current IP regime is a redistributive mechanism which serves the economic interests of developed countries to the detriment of the poorest. Through linkage bargaining by the developed countries, developing countries were forced to accept higher minimum standards of IP rights than optimal for their economies.(6)

The WTO is built upon the idea that through cooperation all members can gain. Whilst this may be true with regards to greater free trade, it is not the case in intellectual property; there must be winners and losers.(7) In summary then, the TRIPS Agreement should be seen as bad policy as it is built upon some rigid, antiquated economic principles while the WTO is an institution no longer suited to a modern global IP system so rife with complexities.

(1)WTO Website, ‘What is the World Trade Organisation?’, Understanding the WTO, Available online at:http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm
(2)WTO Agreement, Agreement on Trade-Related Aspects of Intellectual Property Rights: Text of the Agreement, Available online at: http://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm
(3)WTO Website, ‘Legal texts: the WTO Agreements’, A Summary of the Final Act of the Uruguay Round, Available online at:http://www.wto.org/english/docs_e/legal_e/ursum_e.htm
(4)WTO Agreement, Article 7: ‘Objectives’, Agreement on Trade-Related Aspects of Intellectual Property Rights: Text of the Agreement, Available online at: http://www.wto.org/english/tratop_e/trips_e/t_agm2_e.htm
(5)Joseph E Stiglitz, Claude Henry, ‘Intellectual Property, Dissemination of Innovation and Sustainable Development’, Global Policy, 1 (3) October, (John Wiley & Sons, 2010)
(6)Margaret Chon, ‘Intellectual Property and the Development Divide’, Cardozo Law Review, 27 (6) Spring, (2007) p.2832
(7)Peter M Gerhart, ‘The Tragedy of Trips’, Michigan State Law Review, (2007) 183-184, Available online at:http://www.msulawreview.org/PDFS/2007/1/Gerhart.pdf

My Academic Blog

Hello all,

I am currently a postgraduate student at the University of Exeter. Having read Economics and Politics at undergraduate level I am now studying for the LLM in International Business Law. As part of my course I have to write weekly blogs on a number of issues in economics, politics, and of course, law. For those of you interested, I will post them on here and if you have any thoughts or comments please don’t be a stranger.