PRESS RELEASE
PRESS/350
30 August 2003
(03-4558)
INTELLECTUAL PROPERTY
Decision removes final patent obstacle to cheap drug imports
WTO member governments broke their deadlock ov er intellectual property protection and public
health today (30 August 2003). They agreed on legal changes that will make it easier for poorercountries to import cheaper generics made under compulsory licensing if they are unable to
manufacture the medicines themselves.
The decision settles the one remaining piece of unfinished business on intellectual property and
health that was left over from the WTO Mini sterial Conference in Doha in November 2001.
“This is a historic agreement for the WTO,” said Director-General Supachai Panitchpakdi. “The final
piece of the jigsaw has fallen into place, allowing poorer countries to make full use of the
flexibilities in the WTO’s intellectual property rules in order to deal with the diseases that ravagetheir people.
“It proves once and for all that the organization can handle humanitarian as well as trade
concerns,” he went on. “This particular question has been specially difficult. The fact that WTO
members have managed to find a compromise in such a complex issue bears testimony to their
goodwill.
“It also gives WTO members a good momentum to take to the Ministerial Conference in Cancún.
I sincerely hope ministers can work together to  reach agreement on the other outstanding issues
that they will deal with in Cancún,” he said.
The decision waives countries’ obligations under a provision of the WTO’s intellectual property
agreement. Article 31(f) of the Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Agreement says that production under compulsory licensing must be predominantly for the
domestic market. This effectively limited the ability of countries that cannot make pharmaceuticalproducts from importing cheaper generics from countries where pharmaceuticals are patented.
In the decision, WTO member governments have agreed that the waiver will last until the article is
amended.
Background
Flexibilities such as “compulsory licensing” are written into the TRIPS Agreement — governmentscan issue compulsory licenses to allow other companies to make a patented product or use a
patented process under licence without the consent of the patent owner, but only under certainPRESS/350
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conditions aimed at safeguarding the legitimate interests of the patent holder.
But some governments were unsure of how these flexibilities would be interpreted, and how far
their right to use them would be respected. The African Group (all the African members of theWTO) were among the members pushing for clarification.
A large part of this was settled at the Do ha Ministerial Conference in November 2001.
In the main Doha Ministerial Declaration of 14 November 2001, ministers stressed that it is
important to implement and interpret the TRIPS Agreement in a way that supports public health —by promoting both access to existing medi cines and the creation of new medicines.
They therefore adopted a separate declaration on TRIPS and Public Health. They agreed that the
TRIPS Agreement does not and should not preven t members from taking measures to protect
public health.
They underscored countries’ ability to use the flexibilities that are built into the TRIPS Agreement,
including compulsory licensing and parallel importing.
And they agreed to extend exemptions on pharma ceutical patent protection for least-developed
countries until 2016. (The TRIPS Council completed the legal drafting task on this in mid-2002, see
press release 301 at http://www.wto.org/english/ news_e/pres02 _e/pr301_e.htm ).
On one remaining question, they assigned further work to the TRIPS Council — to sort out how to
provide extra flexibility, so that countries unable to produce pharmaceuticals domestically canimport patented drugs made under compulsory licensing. (This is sometimes called the
“Paragraph 6” issue, because it comes under that paragraph in the separate Doha declaration on
TRIPS and health.)
Article 31(f) of the TRIPS Agreement says products made under compulsory licensing must be
“predominantly for the supply of the domestic market”. This applies directly to countries that canmanufacture drugs — it limits the amount they can export when the drug is made under
compulsory licence. And it has an indirect impact on countries unable to make medicines and
therefore wanting to import generics. They would find it difficult to find countries that can supplythem with drugs made under compulsory licensing.
Members were deadlocked over how to resolve this question, and the original deadline of
31 December 2002 was missed.
The decision
This 30 August 2003 agreement allows any member  country to export pharmaceutical products
made under compulsory licences within the terms set out in the decision (text below). All WTO
member countries are eligible to import under this decision, but 23 developed countries are listed
in the decision as announcing voluntarily that they will not use the system to import.
A separate statement by General Council chairperson Carlos Pérez del Castillo, Uruguay’s
ambassador, is designed to provide comfort to th ose who feared that the decision might be abused
and undermine patent protection. The statement (see below) describes members’ “shared
understanding” on how the decision is interpreted and implemented. It says the decision will be
used in good faith in order to deal with public health problems and not for industrial or commercialpolicy objectives, and that issues such as prev enting the medicines getting into the wrong hands
are important.PRESS/350
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A number of other countries announced separately that if they use the system it would only be for
emergencies or extremely urgent situations. They are: Hong Kong China, Israel, Korea, Kuwait,
Macao China, Mexico, Qatar, Singapore, Chinese Taipei, Turkey and United Arab Emirates
The decision covers patented products or pr oducts made using patented processes in the
pharmaceutical sector, including active ingredients and diagnostic kits.
It is designed to address the public health problems recognized in Paragraph 1 of the Doha
Declaration on TRIPS and Public Health, which sa ys that WTO ministers “recognize the gravity of
the public health problems afflicting many de veloping and least-developed countries, especially
those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.”
The decision takes the form of an interim waiver, which allows countries producing generic copies
of patented products under compulsory licences to export the products to eligible importing
countries. The waiver would last until the WTO’s intellectual property agreement is amended.
The negotiations on the decision were conducted by the chairpersons of the TRIPS Council:
Ambassador Eduardo Pérez Motta of Mexico (2002) and Ambassador Vanu Gopala Menon ofSingapore (2003).
The text of the decision and the General Council chairperson’s statement follow.
For more information, go to the WTO website :
The Doha Declaration on TRIPS and Public Health
http://www.wto.org/english/thewto_e/mi nist_e/min01_e/mindecl_trips_e.htm
The Doha Declaration explained
http://www.wto.org/english/tratop_e/dda_e/dohaexplained_e.htm#trips
 TRIPS and pharmaceutical patents
http://www.wto.org/english/tratop_e/trips_e/pharmpatent_e.htm
IMPLEMENTATION OF PARAGRAPH 6 OF THE DOHA DECLARATION ON
THE TRIPS AGREEMENT AND PUBLIC HEALTH
Decision of 30 August 2003
The General Council,
Having regard to paragraphs 1, 3 and 4 of Article IX of the Marrakesh Agreement Establishing the World
Trade Organization (“the WTO Agreement”);
Conducting the functions of the Ministerial Conference in  the interval between meetings pursuant to
paragraph 2 of Article IV of the WTO Agreement;
Noting  the Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2) (the
“Declaration”) and, in particular, the instruction of the Ministerial Conference to the Council for TRIPS
contained in paragraph 6 of the Declaration to find  an expeditious solution to the problem of the
difficulties that WTO Members with insufficient or no manufacturing capaciti es in the pharmaceutical
sector could face in making effective use of compulsory licensing under the TRIPS Agreement and to
report to the General Co uncil before the end of 2002;PRESS/350
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Recognizing, where eligible importing Members seek to obtain supplies under the system set out in this
Decision, the importance of a rapid response to th ose needs consistent with the provisions of this
Decision;
Noting  that, in the light of the foregoing, exceptional circumstances exist justifying waivers from the
obligations set out in paragraphs (f) and (h) of  Article 31 of the TRIPS Agreement with respect to
pharmaceutical products;
Decides  as follows:
1. For the purposes of this Decision:
(a) “pharmaceutical product” means any patented product, or product manufactured
through a patented process, of the pharmaceutical sector needed to address the publichealth problems as recognized in paragraph 1 of the Declaration. It is understood that
active ingredients necessary for its manufactu re and diagnostic kits needed for its use
would be included
1;
(b) “eligible importing Member” means any least-developed country Member, and any other
Member that has made a notification2 to the Council for TRIPS of its intention to use the
system as an importer, it being understood that a Member may notify at any time that
it will use the system in whole or in a limit ed way, for example only in the case of a
national emergency or other circumstances of extreme urgency or in cases of public
non-commercial use. It is noted that some Members will not use the system set out inthis Decision as importing Members
3 and that some other Members have stated that, if
they use the system, it would be in no more than situations of national emergency orother circumstances of extreme urgency;
(c) “exporting Member” means a Member using th e system set out in this Decision to
produce pharmaceutical products for, and export them to, an eligible importingMember.
2. The obligations of an exporting Member under Arti cle 31(f) of the TRIPS Agreement shall be waived
with respect to the grant by it of a compulsory licence to the extent necessary for the purposes of
production of a pharmaceutical product(s) and its export to an eligible importing Member(s) inaccordance with the terms set out below in this paragraph:
(d) the eligible importing Member(s)
4 has made a notification2 to the Council for TRIPS,
that:
(i) specifies the names and expected qu antities of the product(s) needed5;
(ii) confirms that the eligible importing Member in question, other than a
least-developed country Member, has established that it has insufficient or no
                                               
1 This subparagraph is without prejudice to subparagraph 1(b).
2 It is understood that this notification does not need to be approved by a WTO body in order to use the
system set out in this Decision.
3 Australia, Austria, Belgium, Canada, Denmark, Finlan d, France, Germany, Greece, Iceland, Ireland, Italy,
Japan, Luxembourg, Netherlands, New Zealand, Norw ay, Portugal, Spain, Sweden, Switzerland, United
Kingdom and United States of America.
4 Joint notifications providing the information required under this subparagraph may be made by the regional
organizations referred to in paragraph 6 of this Decision on behalf of eligible importing Members using thesystem that are parties to them, with the agreement of those parties.
5 The notification will be made available publicly by the WTO Secretariat through a page on the WTO website
dedicated to this Decision.PRESS/350
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manufacturing capacities in  the pharmaceutical sect or for the product(s) in
question in one of the ways set out in the Annex to this Decision; and
(iii) confirms that, where a pharmaceutical product is patented in its territory, it has
granted or intends to gran t a compulsory licence in accordance with Article 31
of the TRIPS Agreement and the provisions of this Decision6;
(e) the compulsory licence issued by the exporting Member under this Decision shall
contain the following conditions:
(i) only the amount necessary to meet the needs of the eligible importing
Member(s) may be manufactured under the licence and the entirety of thisproduction shall be exported to the Me mber(s) which has notified its needs to
the Council for TRIPS;
(ii) products produced under the licence shall be clearly identified as being
produced under the system set out in this Decision through specific labelling ormarking. Suppliers should distinguish such products through special packagingand/or special colouring/shaping of the products themselves, provided thatsuch distinction is feasible and does not have a significant impact on price; and
(iii) before shipment begins, the licensee shall post on a website
7 the following
information:
- the quantities being supplied to each destination as referred to in indent (i)
above; and
- the distinguishing features of the product(s) referred to in indent (ii)
above;
(f) the exporting Member shall notify8 the Council for TRIPS of the grant of the licence,
including the conditions attached to it.9 The information provided shall include the name
and address of the licensee, the product(s) for which the licence has been granted, thequantity(ies) for which it has been granted,  the country(ies) to which the product(s) is
(are) to be supplied and the duration of the licence. The notification shall also indicate
the address of the website referred to in subparagraph (b)(iii) above.
3. Where a compulsory licence is granted by an ex porting Member under the system set out in this
Decision, adequate remuneration purs uant to Article 31(h) of the TRIPS Agreement shall be paid in that
Member taking into account the economic value to the importing Member of the use that has beenauthorized in the exporting Member. Where a compulsory licence is granted for the same products in theeligible importing Member, the obligation of that Member under Article 31(h) shall be waived in respectof those products for which remuneration in accordance  with the first sentence of this paragraph is paid
in the exporting Member.
                                               
6 This subparagraph is without prejudice to Article 66.1 of the TRIPS Agreement.
7 The licensee may use for this purpose its own website or, with the assistance of the WTO Secretariat, the
page on the WTO website dedicated to this Decision.
8 It is understood that this notification does not need to be approved by a WTO body in order to use the
system set out in this Decision.
9 The notification will be made available publicly by the WTO Secretariat through a page on the WTO website
dedicated to this Decision.PRESS/350
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4. In order to ensure that the products imported under the system set out in this Decision are used for
the public health purposes underlying their importation, eligible importing Members shall takereasonable measures within their mean s, proportionate to their administ rative capacities and to the risk
of trade diversion to prevent re-exportation of the prod ucts that have actually been imported into their
territories under the system. In the event that an e ligible importing Member that is a developing country
Member or a least-developed country Member experien ces difficulty in implementing this provision,
developed country Members shall provide, on reque st and on mutually agreed terms and conditions,
technical and financial cooperation in order to facilitate its implementation.
5. Members shall ensure the availability of effective legal means to prevent the importation into, and
sale in, their territories of produc ts produced under the system set ou t in this Decision and diverted to
their markets inconsistently with its provisions, us ing the means already required to be available under
the TRIPS Agreement. If any Member considers that such measures are proving insufficient for thispurpose, the matter may be reviewed in the Council for TRIPS at the request of that Member.
6. With a view to harnessing economies of scale fo r the purposes of enhancing purchasing power for,
and facilitating the local production of, pharmaceutical products:
(i) where a developing or least-developed country WTO Member is a party to a
regional trade agreement within the mean ing of Article XXIV of the GATT 1994
and the Decision of 28 November 1979 on Differential and More FavourableTreatment Reciprocity and Fuller Part icipation of Developing Countries
(L/4903), at least half of the current membership of which is made up of
countries presently on the United Nation s list of least-developed countries, the
obligation of that Member under Article 31(f) of the TRIPS Agreement shall bewaived to the extent necessary to enable a pharmaceutical product produced orimported under a compulsory licence in that Member to be exported to themarkets of those other developing or least-developed country parties to the
regional trade agreement that share the health problem in question. It isunderstood that this will not prejudice the territorial nature of the patent rightsin question;
(ii) it is recognized that the development of systems providing for the grant of
regional patents to be applicable in the above Members should be promoted. Tothis end, developed country Members undertake to provide technicalcooperation in accordance with Articl e 67 of the TRIPS Agreement, including in
conjunction with other relevant intergovernmental organizations.
7. Members recognize the desirability of promoting th e transfer of technology and capacity building in
the pharmaceutical sector in order to overcome the pr oblem identified in paragraph 6 of the Declaration.
To this end, eligible importing Members and export ing Members are encouraged to use the system set
out in this Decision in a way which would promot e this objective. Members undertake to cooperate in
paying special attention to the transfer of technology and capacity building in the pharmaceutical sectorin the work to be undertaken pursuant to Article 66.2 of the TRIPS Agreement, paragraph 7 of theDeclaration and any other relevant work of the Council for TRIPS.
8. The Council for TRIPS shall review annually the functioning of the system set out in this Decision
with a view to ensuring its effective operation and shall annually report on its operation to the General
Council. This review shall be deemed to fulfil th e review requirements of Article IX:4 of the WTO
Agreement.PRESS/350
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9. This Decision is without prejudice to the rights, obligations and flexibilities that Members have under
the provisions of the TRIPS Agreement other than para graphs (f) and (h) of Article 31, including those
reaffirmed by the Declaration, and to their interpretat ion. It is also without prejudice to the extent to
which pharmaceutical products produced under a comp ulsory licence can be exported under the present
provisions of Article 31(f) of the TRIPS Agreement.
10. Members shall not challenge any measures taken in  conformity with the provisions of the waivers
contained in this Decision under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994.
11. This Decision, including the waivers granted in it, shall terminate for each Member on the date on
which an amendment to the TRIPS Agreement replacing its provisions takes effect for that Member. TheTRIPS Council shall initiate  by the end of 2003 work on the prepar ation of such an amendment with a
view to its adoption within six months, on the understanding that the amendment will be based, whereappropriate, on this Decision and on the further understanding that it will not be part of the negotiationsreferred to in paragraph 45 of the Doha Ministerial Declaration (WT/MIN(01)/DEC/1).
ANNEX
Assessment of Manufacturing Capacities in the Pharmaceutical Sector
Least-developed country Members are deemed to have insufficient or no manufacturing capacities in the
pharmaceutical sector.
For other eligible importing Members insufficient or no manufacturing capacities for the product(s) in
question may be established in either of the following ways:
(i) the Member in question has established that  it has no manufacturing capacity in the
pharmaceutical sector;
OR
(ii) where the Member has some manufacturing capacity in this sector, it has examined this
capacity and found that, excluding any ca pacity owned or controlled by the patent
owner, it is currently insufficient for the purposes of meeting its needs. When it is
established that such capaci ty has become sufficient to meet the Member’s needs, the
system shall no longer apply.PRESS/350
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The General Council Chairperson’s statement
30 August 2003
The General Council has been presented with a draf t Decision contained in  document IP/C/W/405 to
implement paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. ThisDecision is part of the wider national and intern ational action to address problems as recognized in
paragraph 1 of the Declaration. Before adopting this  Decision, I would like to place on the record this
Statement which represents several key shared understa ndings of Members regarding the Decision to be
taken and the way in which it will be interpreted and implemented. I would like to emphasize that thisStatement is limited in its implications to paragraph 6 of the Doha Declaration on the TRIPS Agreementand Public Health.
First, Members recognize that the system that will be established by the Decision should be used in good
faith to protect public health and, without prejudice to paragraph 6 of the Deci sion, not be an instrument
to pursue industrial or commercial policy objectives.
Second, Members recognize that the purpose of the Decision would be defeat ed if products supplied
under this Decision are diverted from the markets fo r which they are intended. Therefore, all reasonable
measures should be taken to prevent such diversion in accordance with the relevant paragraphs of the
Decision. In this regard, the provisions of pa ragraph 2(b)(ii) apply not only to formulated
pharmaceuticals produced and supplied under the system  but also to active in gredients produced and
supplied under the system and to finished products pr oduced using such active ingredients. It is the
understanding of Members that in general special packaging and/or special colouring or shaping shouldnot have a significant impact on the price of pharmaceuticals.
In the past, companies have developed procedures to prevent diversion of products that are, for
example, provided through donor programmes. “Bes t practices” guidelines  that draw upon the
experiences of companies are attached to this statement for illustrative purposes. Members andproducers are encouraged to draw from and use th ese practices, and to share information on their
experiences in preventing diversion.
Third, it is important that Members seek to resolve  any issues arising from the use and implementation
of the Decision expeditiously and amicably:
• To promote transparency and avoid controversy,  notifications under paragraph 2(a)(ii) of the
Decision would include information on how the Member in question had established, inaccordance with the Annex, that it has insuff icient or no manufacturing capacities in the
pharmaceutical sector.
• In accordance with the normal practice of the TRIPS Council, notifications made under the
system shall be brought to the attention of its next meeting.
• Any Member may bring any matter related to the interpretation or implementation of the
Decision, including issues related to diversion,  to the TRIPS Council for expeditious review, with
a view to taking appropriate action.
• If any Member has concerns that the terms of th e Decision have not been fully complied with,
the Member may also utilise the good offices of the Director General or Chair of the TRIPSCouncil, with a view to finding a mutually acceptable solution.
Fourth, all information gathered on the implementation of the Decision shall be brought to the attention
of the TRIPS Council in its annual review as set out in paragraph 8 of the Decision.
In addition, as stated in footnote 3 to paragrap h 1(b) of the Decision, the following Members have
agreed to opt out of using the system as import ers: Australia, Austria, Belgium, Canada, Denmark,PRESS/350
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Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New
Zealand, Norway, Portugal, Spain, Sweden, Switzerlan d, United Kingdom and United States of America.
Until their accession to the European Union, Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania,
Malta, Poland, Slovak Republic and Slovenia agree th at they would only use the system as importers in
situations of national emergency or other circumst ances of extreme urgency. These countries further
agree that upon their accession to the European Union, they will opt out of using the system asimporters.
As we have heard today, and as the Secretariat has been informed in certain communications, some
other Members have agreed that they would only use the system as importers in situations of national
emergency or other circumstances of extreme urgenc y: Hong Kong China, Israel, Korea, Kuwait, Macao
China, Mexico, Qatar, Singapore, Chines e Taipei, Turkey, United Arab Emirates.
Attachment
“Best practices” guidelines
Companies have often used special labelling, colour ing, shaping, sizing, etc. to differentiate products
supplied through donor or discounted pricing prog rammes from products supplied to other markets.
Examples of such measures include the following:
• Bristol Myers Squibb used different markings/imp rints on capsules supplied to sub Saharan
Africa.
• Novartis has used different trademark names, on e (Riamet®) for an anti-malarial drug provided
to developed countries, the other (Coartem®) for the same products supplied to developing
countries. Novartis further differentiated th e products through distinctive packaging.
• GlaxoSmithKline (GSK) used different outer pack aging for its HIV/AIDS medications Combivir,
Epivir and Trizivir supplied to developing count ries. GSK further differentiated the products by
embossing the tablets with a different number than  tablets supplied to developed countries, and
plans to further differentiate the pr oducts by using different colours.
• Merck differentiated its HIV/AIDS antiretroviral medicine CRIXIVAN through special packaging
and labelling, i.e., gold-ink printing on the capsule, dark green bottle cap and a bottle label witha light-green background.
• Pfizer used different colouring and shaping for Diflucan pills supplied to South Africa.
Producers have further minimized diversion by entering into contractual arrangements with
importers/distributors to ensure delivery of products to the intended markets.
To help ensure use of the most effective anti-div ersion measures, Members may share their experiences
and practices in preventing diversion either informally or through the TRIPS Council. It would bebeneficial for Members and industry to work toge ther to further refine anti-diversion practices and
enhance the sharing of information related to identi fying, remedying or preventing specific occurrences
of diversion.
END