Commission welcomes changes to EU law to allow export of patented medicine to countries in need

The European Commission today welcomes the adoption by the European Council of a regulation allowing companies to produce copies of patented medicines under license for export to “countries in need” without sufficient capacity to produce them. The regulation implements within the EU the necessary conditions to meet a WTO Agreement of December 2005, under which national authorities can grant compulsory licences for such production if certain conditions are fulfilled. Yesterday, the European Commission formally recommended that Member States approve EU ratification of the historic changes to WTO law. Today’s move is a clear signal of their intention to do so. The compulsory licensing regulation represents a crucial measure for some of the poorest countries in the world, which will gain improved access to affordable medicines which are safe and effective.

Internal Market and Services Commissioner Charlie McCreevy said: "This regulation is a key element in ensuring access to affordable medicines for poor countries. Its rapid adoption highlights the EU's commitment to the implementation of the WTO Decision. Countries in need will acquire affordable medicines which are safe and effective and at the same time the patent system will continue to support investment in the research and development of new medicines”.

Trade Commissioner Peter Mandelson said: "This is an important EU contribution to the fight against killer diseases in developing countries. It shows that the EU is committed to the WTO process, and to ensuring that the WTO system can respond to the public health concerns of poor countries in need of affordable medicines."

What was agreed in the WTO in December 2005?

On 6 December 2005, the WTO Members agreed to amend the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). This amendment would make permanent a provisional decision on compulsory licensing originally adopted on 30 August 2003. The WTO General Council has submitted the proposed amendment to the WTO Members for acceptance. Once accepted and in force, this amendment will complete a process that began in 2001 with the Doha Declaration on the TRIPS Agreement and Public Health. The EU strongly supported these changes at every stage.

The existing rules on intellectual property provide that compulsory licences can only be authorised predominantly for the supply of the domestic market. The amendment will allow any WTO Member to export pharmaceutical products made under compulsory licence for the purpose of supplying developing countries with no or insufficient manufacturing capacities in the pharmaceutical sector. The new rules will be formally incorporated into the TRIPS Agreement.

The amendment will take effect for the Members that have accepted it when two thirds of the WTO Members accept the amendment. WTO Members have set themselves until 1 December 2007 to do this. The waiver decision remains in force for each Member until the amendment becomes effective for that Member.

What is being changed at the European level?

The regulation creates a mechanism in line with the WTO General Council Decision of August 2003 so that companies in the EU can apply for a licence to manufacture, without the authorisation of the patent holder, pharmaceutical products for export to countries in need of medicines and facing public health problems. There is no specific restriction on the pharmaceutical products covered, although there is acknowledgement that they are required to address public health problems since that is the context of the Decision.

It represents an instrument that will allow the compulsory licensing procedure of the WTO decision to fit within the context of Member States’ national patent law and their compulsory licensing procedures. This is to give transparency and clarity for those companies operating within the EU’s internal market and wishing to apply for compulsory licences for export to countries in need.

Provided countries in need notify to the WTO the medicines they need, it would be up to generic companies to decide to apply for licences to manufacture them.

Once export takes place, all parties have an interest in seeing that medicines are not diverted from those who need them. The regulation prohibits re-importation into the EU and provides for customs authorities to take action against goods being re-imported. The patent holder can use existing national procedures to enforce its rights against re-imported goods if they do enter the EU, and the licence can be terminated.

The regulation also foresees a role for non-governmental and international organisations as being potentially involved in any purchasing procedures and able to make requests on behalf of an importing country with that country’s approval.

Safety and efficacy of medicines for export can be certified through the EU’s scientific opinion procedure, or equivalent national procedures. The EU felt this was a necessary complement to the licensing mechanism in order to assist importing countries.