ANNUAL REVIEW OF THE special compulsory licensing system
Report
to the General Council
_______________
1. Paragraph
7 of the Annex to the TRIPS Agreement as amended by the
Protocol Amending the TRIPS Agreement ("the Protocol")[1] and paragraph 8 of the Decision on the Implementation of Paragraph 6 of the
Doha Declaration on the TRIPS Agreement and Public Health of 30 August 2003 ("the
2003 Decision") respectively[2] provide that the Council for TRIPS shall review annually
the functioning of the Special Compulsory Licensing System ("the
System")[3] established under Article 31bis
of the amended TRIPS Agreement and the 2003 Decision with a view to ensuring
its effective operation. The Council is required to report annually to the
General Council on its operation.
2. The Council for TRIPS undertook the
20th annual review in October 2023. The General Council took
note of the report of the Council for TRIPS (document _IP/C/97) at its meeting on 13‑15 December
2023 (document _WT/GC/M/208, paragraph 6.17).
3. The present report covers the
period from October 2023. At its meeting of 6-7 November 2024, the Council
undertook the 21st annual review. Annex 1 and Appendix 1
to this report record the review and the statements made by delegations.
4. Sections 1 and 2 below set out
factual information on the implementation and use of the System, as well
as the entry into force of the Amendment to the TRIPS Agreement and
the status of acceptances of the Protocol. Section 3 provides an overview
of capacity-building activities organized by the Secretariat in response to
requests by Members to assist them in making the System work effectively in
practice.
1 Information on implementation and use
of the System
5. Since the last annual review, no
Member has notified an amendment to its legislation implementing the System
into its domestic law. A compilation of notified implementing laws and
regulations, including hyperlinks to the legal texts, is available on a dedicated
page on the WTO website.[4]
6. During the period covered by the
present report, no notifications by importing or
exporting Members pursuant to paragraphs 1(b), 2(a) and 2(c) of the Annex to
the amended TRIPS Agreement and the 2003 Decision respectively have been made to the Council for
TRIPS. The Secretariat regularly updates a page on
the WTO website to ensure the public availability of notifications made under
the System.[5]
7. Members seeking to use
the System are encouraged to submit their notifications using the e‑TRIPS
Submission System,[6] which is an online tool for WTO Members to submit
notifications, review materials and reports related to the TRIPS Agreement.
Access credentials to use the e‑TRIPS Submission System are available upon
request to e-TRIPS@wto.org. Members may also
consult a Guide to notifications, including a set of model notifications, on
the WTO's webpage.[7] The accessibility of notifications, once circulated, has
been further enhanced through their inclusion on the related publicly
accessible e-TRIPS Gateway.[8]
4 Amendment to the TRIPS Agreement
8. In accordance with paragraph 3 of
Article X of the WTO Agreement, the Protocol entered into force
on 23 January 2017, by which date two thirds of the WTO Members had
accepted it.
9. Pursuant to paragraph 3 of Article
X of the WTO Agreement, the Protocol takes effect for each other Member upon
its acceptance. Since the 20th annual review in 2023, Tunisia[9] and Armenia[10] have accepted the Protocol.
10. In addition, Comoros and Timor-Leste
acceded to the WTO Agreement as amended at the time of their accession in
August 2024, and are thereby bound by the amended TRIPS Agreement.
11. Information on the status of
acceptances of the Protocol can be found on a dedicated webpage which is
regularly updated by the WTO Secretariat.[11]
12. As of 5 November 2024, the amended
TRIPS Agreement applied to 141 Members. The following 25 WTO Members were yet
to accept the Protocol and continued to operate on the basis of the 2003 Decision:
1._ Afghanistan
2._
Angola
3._
Cabo Verde
4._
Cameroon
5._
Chad
6._
Democratic Republic of the Congo
7._
Djibouti
8._
Ghana
9._
Guatemala
10._ Guinea-Bissau
11._ Guyana
12._ Haiti
13._ Jamaica
14._ Kazakhstan
15._ Kuwait, the State of
16._ Liberia
17._ Mauritania
18._ Mozambique
19._ Solomon Islands
20._ Suriname
21._ Tonga
22._ Vanuatu
23._ Venezuela, Bolivarian Republic of
24._ Yemen
25._ Zimbabwe
13. At the Council's meetings in
October 2023 and June and November 2024, the respective Chairs of the Council
for TRIPS updated Members on the state of play of acceptances. They also
encouraged delegations that were yet to accept the TRIPS amendment to take the
necessary steps so that the domestic procedures could be completed as soon as
possible.
14. The Protocol is currently open for
acceptance by these Members until 31 December 2025 or such later date as may be decided by
the Ministerial Conference (document _WT/L/1180).
5 making the system work
15. Echoing the former TRIPS Council
Chair's note of the importance "to look into how to make this new
procurement tool work effectively so that it delivers concrete results in
practice"[12], Members have called for awareness raising and capacity-building for
potential users of the System, targeting, in particular, procurement officers
in charge of buying medicines and representatives from IP offices, as well as
the provision of legislative assistance to countries that were considering
implementing the System in domestic law.
16. In line with these deliberations of
the Council for TRIPS following the entry into force of the amended Agreement
in January 2017, the Secretariat has continued to provide technical assistance,
in cooperation with multilateral partners, relating to the effective use of the
System.[13] Relevant capacity-building activities included a module dedicated to
the System at the annual Trade and Health Workshop, organized by the WTO
Secretariat from 6-10 November 2023 in close collaboration with WHO and WIPO.[14]
17. The capacity-building activities
are based on the second edition of the WHO-WIPO-WTO study on "Promoting
Access to Medical Technologies and Innovation – Intersections Between Public
Health, Intellectual Property and Trade" which was launched on 29 July
2020. It sets out explanatory background material on the implementation and use
of the System.[15] Updated background information is also available on the WTO's webpage
dedicated to public health.[16] This is complemented by the second update of the extract from the Trilateral Study on an Integrated Health, Trade
and IP Approach to Respond to the COVID-19 Pandemic, published by the WHO, WIPO
and WTO Secretariats in May 2023.[17] In addition,
focused technical assistance materials have been developed to enable interested
Members effectively to assess the operational context of the System and to
support their effective use of it.
_______________
ANNEX 1
[Excerpt
from the Minutes of the Council's meeting of 6-7 November 2024
to be circulated as document IP/C/M/112]
_______________
7 annual review of the special compulsory
licensing system (paragraph 7 of the annex to the amended trips agreement
and paragraph 8 of the decision on the implementation of paragraph 6 of the
doha declaration on the trips agreement and public health)
1. The
Chair recalled that paragraph 7 of the Annex to the amended TRIPS
Agreement and paragraph 8 of the 2003 Waiver Decision required the Council to
review the functioning of the System annually, with a view to ensuring its
effective operation. They also required the Council to report annually on the
System's operation to the General Council. In the case of the Waiver Decision,
this review was also deemed to fulfil the requirements of Article IX:4 of the
WTO Agreement.
2. The
Chair updated Members on the status of acceptances of the TRIPS Protocol. The
current period for accepting it ran until 31 December 2025. She noted that
since the Council's last meeting, two more Members had deposited their
instrument of acceptance. These were Tunisia on 2 October 2024 and Armenia on 5
November 2024.
3. In
addition, the two most recent WTO Members, Comoros and Timor-Leste, had acceded
to the WTO Agreement as amended at the time of their accession in August 2024,
and were thereby bound by the amended TRIPS Agreement. This meant that the
amended TRIPS agreement applied to 141 WTO Members and that 25 WTO Members were
yet to accept the Protocol. The Chair encouraged those Members to complete
their domestic procedures and deposit their instrument of acceptance with the
WTO Director-General as soon as possible.
4. When
the TRIPS Amendment had entered into force in January 2017, Members had noted
that it would be useful to consider how to make this new procurement tool work
effectively in practice. The Chair therefore encouraged Members to engage in a
constructive discussion which could also build on earlier reviews, as recorded
for instance in the Council's Annual Review Report of 2016 (circulated in
document IP/C/76), as well as the
Secretariat's 2016 Report on Technical Cooperation Activities (circulated in
document IP/C/W/618).
5. The
representatives of India, Brazil, Colombia, Egypt
and Switzerland took the floor.
6. The
Council took note of the statements made.
7. The
Chair turned to the Council's report to the General Council. A draft
report had been prepared by the Secretariat (circulated in document JOB/IP/80).
It was modelled on previous years' reports and contained factual information on
the implementation and use of the System. Under the section on the Amendment to
the TRIPS Agreement, it also included a list of Members who were yet to accept
the Protocol Amending the TRIPS Agreement. As with past reports, an extract
from the Council's minutes on this agenda item would be attached to the report
in Annex 1 and Appendix 1.
8. The
Council agreed to adopt the draft report and to attach the record of the
discussion to it.
_______________
Appendix 1
[Excerpt
from the Addendum to the Minutes, containing the statements made during the
Council's meeting held on 6-7 November 2024, to be circulated as document IP/C/M/112/Add.1]
agenda
item 7: annual review of the special compulsory licensing system (paragraph 7
of the annex to the amended trips agreement and paragraph 8 of the decision on
the implementation of paragraph 6 of the doha declaration on the trips
agreement and public health)
6
7
7.1 India
1. The
amended TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and
Public Health were historical decisions made in the context of challenges faced
by developing countries in view of public health crisis. These decisions have
helped in providing additional public policy tools, despite various limitations
and constraints therein. They support developing Members and LDCs in enabling
access to affordable essential medical products and medicines to general
public. These decisions provide legitimate policy space required when necessary
in case of emergent public health situations. Further, it is very much
essential that there is capacity development and technical support to
developing and LDC Members to effectively utilize these provisions when needed.
The Council may also discuss constraints and limitations in current provisions
which were in detail also discussed during the debate of the TRIPS waiver
decision.
7.2 Brazil
2. Brazil
appreciates the opportunity to discuss the Special Compulsory Licensing System
under Article 31bis, a critical tool designed to address public health
needs. However, we note with concern that this System remains largely
underutilized, with only one case of use to date.
3. The
System's complexity and administrative requirements, including the need to
negotiate voluntary licenses before compulsory licensing, have deterred
countries from leveraging the System in emergencies. Brazil believes that
simplifying the process and removing some of the bureaucratic barriers would
make the system more accessible, especially for countries without domestic
pharmaceutical manufacturing capacity.
4. The
COVID-19 pandemic highlighted the urgent need for equitable access to
lifesaving medical products and yet the current System proved ineffective in
supporting global public health needs. Brazil, along with other developing
countries, calls for an assessment of the deficiencies in the current system.
5. Reforms
should aim to streamline the application process, eliminate the requirement for
country‑by-country and drug-by-drug determinations, and provide more
flexibility for countries to respond swiftly to public health crisis. By making
these adjustments, the Council for TRIPS would reaffirm its commitment to the
Doha Declaration and the right of Members to protect public health.
6. We
emphasize the importance of expanding South-South cooperation and technical
assistance to help countries effectively implement TRIPS flexibilities. Brazil
stands ready to work with Members and organizations to build a more robust,
responsive, and practical compulsory licensing system that can truly support
developing countries in addressing their health challenges.
7. The
proactive role of the Council for TRIPS in these improvements would represent a
significant step towards realizing the TRIPS Agreement's objectives regarding
public health.
7.3 Colombia
8. This
Council is undertaking the 21st annual review of the Special Compulsory
Licensing System. This means that 21 years have passed since the adoption of
the 2003 Decision that created the basis for this new system.
9. This
year again, and already seven years since the entry into force of the Protocol,
no one has effectively used the System, as on all previous occasions. We wonder
if maybe one day we should be brave and recognize that the System does not
work, that the device solution for a diagnosed problem is not efficient.
10. Indeed, the System was overburdened with requirements and
procedures, so it did not facilitate the issuing of special compulsory licenses
for the benefit of net importing small Members. It is not a matter of awareness
or literacy. Sometimes the blame falls on the small Member, but when the
situation is the same for all of them, developed and developing that have tried
alike, year after year, the problem of efficacy of operation looks more
complicated. This is a good example of a topic that could be thoroughly considered
in the course of the informal discussions on the review of the implementation
of the TRIPS Agreement.
7.4 Egypt
11. Egypt appreciates the opportunity to participate in this discussion
on the Special Compulsory Licensing System under Article 31bis of the
amended TRIPS Agreement. We note the importance of the System as a tool for Members
lacking sufficient pharmaceutical manufacturing capacity to access essential
medicines. However, we are concerned that since its adoption, there has been
only one case of use and none since the amendment came into force.
12. This signals serious challenges and limitations within the System,
particularly when addressing global health crises such as the COVID-19 pandemic.
We therefore urge the Council for TRIPS to consider several key issues
hindering the System's effectiveness, including, but not limited to the
requirement for generic manufacturers to first seek a voluntary license from
the patent holder. This creates delays and can discourage companies from
pursuing compulsory licenses. We propose that this requirement be reassessed,
especially in urgent health contexts. Second, the complex and lengthy
administrative steps involved in issuing a special compulsory license place a
significant burden on Members, particularly those with limited resources. We
suggest that the Council explore ways to simplify and expedite this process,
making it more accessible for Members in need.
13. Third, the current drug-by-drug, country-by-country, and
case-by-case approach creates further inefficiencies. We would encourage
Members to consider a more flexible and broader framework that enables quicker,
more responsive action in times of health crises. Fourth, patent holders have
the option to offer medicines at a lower cost or for free after the Member has launched
the process to use the System. This practice can disrupt the efforts of Members
trying to utilize the System and should be reviewed to ensure fair and
consistent access. The lack of use of the System even during the COVID-19
pandemic highlights its limitations and underscores the need for targeted
improvements. We therefore call on the Council to work collectively to address
these deficiencies, thereby strengthening the System to respond effectively to
the health needs of vulnerable populations worldwide.
7.5 Switzerland
14. My delegation would like to first thank the Secretariat for
circulating the draft annual report and for finalizing it after this Council's
meeting. My delegation also encourages those Members that have yet to accept
the TRIPS amendment to do so until December 2025, when the deadline is going to
expire. Should a Member require support for this, we trust the WTO Secretary
will, as always, stand ready to provide its professional assistance.
15. My delegation would also like to thank the Secretariat for its
capacity-building activities in the past year on the functioning of the 31bis
System and its effective use. Making the so‑called Paragraph 6 mechanism
on patents and public health permanent in their decision of 6 December in
2005, and amending the TRIPS Agreement accordingly by including Article 31bis
in its Part 2, Section 5 of the TRIPS Agreement, Members ensure transparency,
clarity, and legal certainty.
16. Some delegations claim that the System in Article 31bis is
complex and burdensome. We refer Members to the easy-to-follow step-by-step
procedure as it is well illustrated on WTO's helpful website that demonstrates
that the System's use is straightforward. From the fact that the mechanism has
been only used once so far, it cannot be concluded that the System is not
workable. Many reasons may come into play for the little use of the mechanism,
and they are not linked to the 31bis System. Members have a number of
alternatives to choose from when procuring needed medicines and which in this
specific case might be considered preferable options. This delegation has
commented on this in detail in past annual reviews and for the sake of brevity
we refer Members to our statements in the minutes of these meetings.
17. In our discussion under the annual review so far, we have not heard
from eligible beneficiary Members under this agenda item that they have faced
hurdles when actually wishing to make use of the 31bis System in
practice. Only on the basis of such factual evidence would we consider it
worthwhile to discuss and look at the good functioning of the mechanism under
Article 31bis of the TRIPS Agreement.
__________
[1] The Protocol which was adopted on 6 December 2005 (document WT/L/641)
entered into force on 23 January 2017 (see below under Section 2).
[2] Note that the TRIPS Agreement as amended on 23 January 2017 only
applies to WTO Members who have accepted the Protocol. For other Members who
are yet to accept it, the General Council Decision of 30 August 2003
(document _WT/L/540
and WT/L/540/Corr.1)
continues to constitute the legal basis, including as regards the Annual Review
of the Special Compulsory Licensing System. For the purposes of the 2003
Decision, this review is deemed to fulfil the review requirements of
Article IX:4 of the WTO Agreement.
[3] See also the definition in paragraph 1 (b) of the Annex to the
amended TRIPS Agreement.
[12] See minutes of the TRIPS Council meeting of 30 January 2017
(document _IP/C/M/84,
para.9).