29/10/2004
Commission proposes to allow export of generic medicines to poor countries

The European Commission has proposed a Regulation to allow manufacturers of generic pharmaceuticals to produce patented medicines for export to “countries in need” without sufficient capacity to produce them. The Regulation would implement within the EU a WTO decision of 30th August 2003 (see IP/03/1189) under which national authorities can grant “compulsory licences” for such production if certain conditions are fulfilled. One requirement is that the destination country must have notified the WTO that it is seeking the medicine covered by the licence.

The proposed Regulation puts no further restriction on the medicines and diseases to be covered. To help ensure that medicines get to the patients who need them and to protect patent holders, customs authorities will be able to prevent the re-importation into the EU of medicines produced under the system.

Internal Market Commissioner Frits Bolkestein said: “The WTO decision and our proposed Regulation can help save lives by helping countries in need to acquire affordable medicines, without undermining the patent system, which is one of the main incentives for the research and development of new medicines.”

Trade Commissioner Pascal Lamy said: “By adopting this proposal the EU leads the way in ensuring access to affordable medicines for poor countries. It shows that we are delivering on our promises in the Doha Development Agenda. I now hope that it can be taken forward quickly by the EU Member States and the European Parliament.”

The proposed Regulation would set up a system for companies who wish to manufacture medicines for export to apply to national authorities for the grant of a “compulsory licence” from a patent holder who has exclusive rights over the manufacture and sale of the products concerned. Most national laws at present do not allow compulsory licences for export because until recently the WTO TRIPS Agreement provided for compulsory licences only “predominantly for the supply of the domestic market”. The Doha declaration on trade and health adopted in November 2001 agreed to address the difficulties raised by this restriction for developing countries with no manufacturing capacity. After long negotiations, on 30 August 2003 WTO members agreed on a waiver giving these countries access to much needed generics.

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 Commission’s proposal would prohibit re-importation into the EU and provide for customs authorities to take action against goods being re-imported. The patent holder could use existing national procedures to enforce its rights against re-imported goods if they do enter the EU, and the licence could be terminated