TRIPS Agreement: Paragraph 6 system

Article 31(f) of the TRIPS Agreement states products made under compulsory licensing must be “predominantly for the supply of the domestic market”. Countries producing drugs under compulsory licensing therefore face restrictions in exporting these products. Such restriction however has an impact on countries without manufacturing basis to produce such medicines and therefore wanting to import the less expensive generic drug.

Paragraph 6 of the Doha Ministerial Declaration on the TRIPS Agreement and Public Health recognized that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement“.

General Council Decision of 30 August 2003 removes this legal impediment by adopting a waiver to article 31(f) which allows producers to export drugs produced under compulsory licensing to countries without manufacturing capacity.  The Decision however requires that the importing country demonstrate lack of manufacturing, except in the case of the least developed countries. As stated in Annex on the 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.”

Subsequently, on 6 December 2005, a Protocol to amend the TRIPS Agreement to give this provision a permanent legal status was submitted for signature by Members. The changes will be formally built into the TRIPS Agreement, and permanently replace the 2003 Waiver (originally bound to expire on 1 December 2007) when two thirds of the WTO membership have accepted the Protocol. Such benchmark has not been reached yet. Consequently, the waiver has been extended four times since its adoption. The most recent extension took place on 27 November 2013 , when the Waiver was further extended until 31 December 2015 or “such later date as may be decided by the Ministerial Conference.”

Latest status: INTELLECTUAL PROPERTY – TRIPS & PUBLIC HEALTH; Members accepting amendment of the TRIPS Agreement


Utilization by LDCs:

Rwanda is the only LDC that has benefited from the special and differential treatment under the Paragraph 6. In the survey undertaken by DESA, LDCs reported being unable to fully utilize this flexibility for the following reasons:

  • It is cumbersome to utilize this flexibility (Tanzania)
  • Low prevalence of those diseases that could be treated by products which could be provided under compulsory license, as well as lack of manufacturing capacity (Senegal)
  • Uganda acknowledged that it was difficult to use this provision and that policy makers did not have enough knowledge about it. In Uganda’s case, another reason given was that most of the pharmaceutical products used in Uganda are donor-funded.

21 LDCs have signed the Protocol amending the TRIPS Agreement submitted on 6 December 2005. They are Bangladesh, Benin, Burkina Faso, Cambodia, Central African Republic, the Democratic Republic of the Congo, Guinea, Lao People’s Democratic Republic, Lesotho, Madagascar, Malawi, Mali, Myanmar, Nepal, Rwanda, Senegal, Sierra Leone, Togo, Uganda, United Republic of Tanzania and Zambia. Members who are yet to accept the amendment currently have until 31 December 2019 to do so (document WT/L/1024). For them, the waiver will continue to apply until a member accepts the amendment and it takes effect for it.

Available Smooth Transition Procedures:

Resources:

  1. IP/C/W/631/Add.7: Council for Trade-Related Aspects of Intellectual Property Rights – REPORT ON THE IMPLEMENTATION OF ARTICLE 66.2 OF THE TRIPS AGREEMENT
  2. Special and Differential Treatment Provisions in WTO Agreements and Decisions – Note by the Secretariat
  3. Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health
  4. Paragraph 18 of the Doha Ministerial Declaration
  5. Doha Ministerial Declaration on the TRIPS Agreement and Public Health
  6. WTO document WT/L/641, 8 December 2005, “Amendment of the TRIPS Agreement – Decision of 6 December 2005African Regional Intellectual Property Organization (ARIPO)
  7. African Intellectual Property Organization (OAPI)
  8. WT/L/1024-AMENDMENT OF THE TRIPS AGREEMENT – SIXTH EXTENSION OF THE PERIOD FOR THE ACCEPTANCE BY MEMBERS OF THE PROTOCOL AMENDING THE TRIPS AGREEMENT (Decision of 30 November 2017)