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Oxfam Policy paper on WTO Patent Rules and Access to Medicines
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WTO Patent Rules and Access to Medicines: The Pressure Mounts
http://oxfam.org.uk/policy/papers/wtorules.htm

You can download an .rtf format file (48 Kb) of this paper from:
http://oxfam.org.uk/policy/papers/wtorules.rtf

Oxfam Policy Papers - Oxfam GB Background Briefing 06/01


Executive Summary

Public outrage over the exorbitant prices of HIV/AIDS drugs in Africa 
is focussing public attention on the harmful role of global patent 
rules in blocking poor people's access to vital medicines. In re-
sponse to mounting public pressure, World Trade Organisation (WTO) 
members have taken an unprecedented step in agreeing to hold a spe-
cial meeting to discuss the impact of global patent rules on access 
to medicines. They will meet on 20 June at the WTO in Geneva.

The WTO has the power to change patent rules. As a result, this meet-
ing, and the forthcoming WTO Ministerial in Qatar, offers the best 
opportunity yet to shift the balance of global patent rights in the 
interests of public health. The outcome of the meeting will have a 
critical effect on poor people's access to medicines.

Inventors need some protection but under the WTO's Agreement on 
Trade-Related Aspects of Intellectual Property Rights (TRIPS) they 
are getting far too much. Briefly stated, the Agreement, which is the 
product of one of the most successful corporate lobbying campaigns in 
history, creates an effective legal monopoly for patent holders 
across the world of a minimum of 20 years, enforceable by trade sanc-
tions. This will drive up the price of vital medicines in poor coun-
tries, benefiting narrow corporate interests at the expense of public 
health. 

The winners will be the large northern-based companies where innova-
tion is concentrated and which account for 90 per cent of pharmaceu-
tical patents. The strengthened protection provided by the Agreement 
allows them to sell their new medicines at higher prices for longer 
periods in more countries. The losers are the millions of people in 
poor countries who will be further excluded from access to these vi-
tal medicines, and their cash-strapped government health services. 

It is not surprising that the TRIPS Agreement is fast becoming the 
epicentre of a battle which pitches some of the world's most powerful 
pharmaceutical companies, backed by rich governments, against some of 
the world's most vulnerable people. More widely, there is a growing 
sense that the Agreement is fundamentally unfair and unbalanced - a 
fact which threatens to bring not only the patent system but also the 
whole multilateral rules-based system into disrepute, and which pol-
icy makers ignore at their peril. 

What is certain is that TRIPS will need serious revision if it is to 
stem the growing public backlash against patent rules. The recent 
controversy over the attempts by 39 pharmaceutical companies to block 
a law which allowed the South African government to shop around for 
cheaper patented products in other countries, and which the companies 
claimed violated the TRIPS Agreement, gave the world a graphic illus-
tration of why the rules need to change. 

Oxfam is calling for TRIPS to be reformed so that developing-country 
governments have the unambiguous right to obtain the cheapest possi-
ble life-saving medicines without facing the threats of legal chal-
lenges or trade sanctions experienced by South Africa and Brazil. To 
this end, Oxfam is asking WTO members to agree to:

* an in-depth review of the health and development impacts of TRIPS, 
with a view to reducing the length and scope of pharmaceutical patent 
protection in developing countries, or exempting developing countries 
from pharmaceutical patenting. 

* a moratorium on trade disputes with developing countries over TRIPS 
compliance until a review of TRIPS is concluded, and the concerns of 
developing countries about its implementation are addressed. 

* a commitment by rich countries not to exert bilateral pressure on 
developing countries to implement unnecessarily strict and poten-
tially harmful intellectual property standards (whether through bi-
lateral or regional trade agreements, or by other means). 

* outlaw the use, or threatened use, of bilateral trade sanctions for 
enforcing unnecessarily strict and potentially harmful levels of in-
tellectual property protection in developing countries, such as the 
'Special 301' provisions of the USA's trade act. 

* stronger public-health safeguards and exceptions to give govern-
ments the option of reducing the length and scope of pharmaceutical 
patenting on public health grounds. These should include: - a 
strengthened and meaningful public-health safeguard in Article 8; - 
the option to exempt vital medicines from patenting on public-health 
grounds under Article 30; - an easing of the conditions for compul-
sory licensing, including restrictions on the production of medicines 
for export to another country where a compulsory licence has been is-
sued, and the development of fast-track procedures for public-health 
purposes. 

* longer transition periods for developing countries before they have 
to implement TRIPS, based on their attainment of development mile-
stones rather than arbitrary dates. 

These are modest proposals. If agreed, they would merely mark a re-
turn to the situation for poor countries prior to TRIPS. This would 
not, as the pharmaceutical companies claim, significantly reduce R&D 
into the diseases of poverty, nor jeopardise patent protection in 
richer countries.

Of course, reforming TRIPS is not a panacea. A broad package of meas-
ures is needed to improve access to medicines and to ensure adequate 
R&D into treatments for poverty-related diseases. These include mas-
sive investment in public-health services, public funding of R&D, and 
comprehensive systems of tiered pricing. 

Nor will reform of TRIPS provide any guarantee that all governments 
will take positive action to improve poor people's access to medi-
cines. It will, however, remove a key legal obstacle that currently 
constrains poor governments from obtaining the cheapest possible 
medicines for their citizens, and allow market forces to reduce 
prices through generic competition.

However, attempts by developing countries to change TRIPS so that it 
better reflects broader social and developmental objectives have been 
blocked by some rich countries, particularly the US. These countries 
continue to repeat pharmaceutical industry scaremongering that any 
tampering with new global patent rules will reduce company profits 
and undermine R&D. 

If the USA or other rich countries block proposals to reform patent 
rules aimed at protecting public health, developing countries should 
push the issue to a vote at the forthcoming 4th Ministerial. They 
have little to lose. It is true that if the USA believes its commer-
cial interests are being prejudiced at the WTO, it's commitment to 
multilateralism may weaken. But it would be far more damaging for 
public health and the multilateral system if developing countries re-
nounced their efforts to seek pro-health and development reforms of 
TRIPS on these grounds. Moreover, the USA is already using bilateral 
pressure, including the threat of trade sanctions to ratchet up in-
tellectual property standards outside the WTO. 



Introduction

The decision by WTO members to support the African nations proposal 
for a Special Session of the TRIPS Council on patents and access to 
medicines is a welcome response to developing country and public con-
cern about the issue. It offers a unique opportunity to change the 
rules in favour of public health. 

The TRIPS Agreement was championed by Northern governments under the 
influence of powerful corporations, with the pharmaceutical industry 
providing much of the leadership and finance. It requires all 140 WTO 
members to provide a minimum of 20-year patent protection for prod-
ucts and processes in all sectors, or risk the threat of trade sanc-
tions. 

At a time when millions of people in poor countries are already un-
able to afford essential medicines, and when public health is being 
threatened by a combination of new diseases and drug-resistant vari-
ants of old killers, the Agreement will further reduce access to new 
medicines by effectively extending the monopolies of drug companies 
and restricting generic competition. 

The recent controversy around the excessive price of patented 
HIV/AIDS medicines South Africa graphically illustrated the negative 
impact of TRIPS on access to medicines. The legal complaint by the 39 
pharmaceutical companies also demonstrated the way in which powerful 
corporations use legal pressure to reinterpret TRIPS in their own in-
terests. 

A similar pattern of commercial and political pressure is now being 
repeated in Brazil, where international pharmaceutical companies are 
pressing for reforms in Brazil's patent law in order to further their 
business interests. As well as claiming that the law does not comply 
with TRIPS, they object strongly to the price controls on medicines 
and to the way in which the Brazilian government has warned that it 
will suspend patent rights on AIDS drugs unless prices come down. 

The companies have threatened to stop investing in Brazil unless 
these policies change. They have also persuaded the USA to exert dip-
lomatic pressure, backed by the threat of trade sanctions, and to re-
quest the establishment of a WTO dispute settlement panel to rule on 
the alleged violations of the TRIPS agreement. Although the law in 
question does not specifically refer to pharmaceuticals, and has not 
been applied to the industry, it can be used by the Brazilian govern-
ment to help ensure secure and affordable access to vital medicines. 
[1]

In the run up to the 3rd WT0 Ministerial at Seattle, developing coun-
tries put forward concrete proposals which aimed to reform the TRIPS 
Agreement in the interests of public health. Similar proposals were 
raised again at the UN General Assembly on Social Development by the 
Group of 77 countries, which represents most of the developing world. 
Various options have been proposed, ranging from proposals to exempt 
essential medicines from TRIPS or to shorten the patent period for 
pharmaceutical products. Such proposals have been blocked by rich 
countries.

Due to the sheer weight of public opinion, and the international out-
cry around the South Africa court case, there are now signs of a more 
enlightened pro-health position on TRIPS by some European Union gov-
ernments. On 14 May this year, the EU Council of Ministers passed a 
resolution on communicable diseases which endorses governments' use 
of the public-health safeguards within TRIPS. It also states that the 
European Commission should 'report its findings to the Council' once 
it has investigated what needs to be done to 'ensure consistency' be-
tween international patent rules and public health. This opens the 
door to possible future changes to the EU position on TRIPS. But 
while the resolution was carried unanimously, some governments inside 
the EU are seen as blocking more enlightened positions.

However there is a risk that any meaningful attempts to reinterpret 
or change WTO rules in the interests of public health at the June 
TRIPS Council or at the 4th WTO Ministerial in Qatar, will be blocked 
by US stonewalling. Even more reprehensibly, the USA is using bilat-
eral pressure including the threat of trade sanctions to ratchet up 
intellectual property standards outside the WTO. One tactic is to ne-
gotiate higher standards in bilateral or regional trade agreements 
with developing countries which, under WTO rules on Most Favoured Na-
tion, then have to be extended to all other countries. The US-Jordan 
free trade agreement, for example, restricts the grounds for compul-
sory licensing and places conditions on its use for imports.

The strength of the corporate lobby has also helped keep the issue of 
patents off the agenda of a number of a high-level initiatives which 
have recently sprung up to help combat communicable diseases in poor 
countries. But with media attention now focusing on the special ses-
sion of the TRIPS Council discussing patents and access to medicines, 
it will be increasingly hard for rich governments to duck the issue. 
Indeed, the level of public awareness is such that the companies risk 
further damage to their reputation if they are they are seen to be 
complicit in blocking reform proposals behind the scenes at the TRIPS 
Council.

Why the rules need to change

Public officials from rich countries often present TRIPS as an agree-
ment which has struck a delicate balance between the need to maintain 
incentives for R&D, and the need to ensure the greatest possible dif-
fusion of technology. Both the UK government and the EC argue that 
TRIPS contains sufficient flexibility to allow governments to adapt 
it to their needs and address health considerations and other social 
goals. Oxfam, on the other hand, believes that the Agreement needs 
fundamental reform.

The central problem is that TRIPS represents a significant expansion 
in the length and scope of patent protection for many developing 
countries. The introduction of 20-year patents on all products and 
processes, even with safeguards, can hardly be considered flexible. 
The limited public interest safeguards will not on their own off-set 
the potentially disastrous effects of rising prices associated with 
the extension of monopolies and restrictions on generic production 
under TRIPS.

Poorer countries cannot absorb the higher prices associated with 
strengthened patent protection. For the 1.4 billion people in the 
world living on or near the poverty line, even marginal increases in 
patent prices can place effective treatment of life-threatening 
treatments out of reach. Drugs typically represent the single biggest 
item in household health spending, accounting for over 80 per cent of 
the total in countries such as India. Prior to TRIPS, countries were 
free to strike their own balance between encouraging innovation and 
maximising the availability of affordable medicines to their people. 
Many developing countries used this freedom to exempt drugs from pat-
enting or to grant short patent periods allowing low-price generic 
versions of new products to enter the market within a few years of 
the launch of the originals. Other countries, such as India, provided 
only process patents rather than product patents, thereby allowing 
local manufacturers to develop equivalent products using alternative 
processes.

TRIPS will severely curtail the use of such measures. That is why Ox-
fam is calling for a fundamental review of the Agreement with a view 
to reducing the length of pharmaceutical patenting in developing 
countries, or exempting developing countries entirely from the phar-
maceutical patenting.

Why Brazil's success in controlling AIDS could not be repeated under 
TRIPS 

Brazil is renowned for its success in tackling AIDS. One important 
factor in significantly reducing transmission, morbidity, and deaths 
has been the free distribution of anti-retroviral drugs since 1996, 
including those needed to stop mother-to-child transmission. Cur-
rently, the health service provides free ARV treatment to 95,000 peo-
ple. This is only possible because ten of the twelve drugs needed are 
not patented in Brazil and can therefore be produced as generics, 
without paying the royalties or monopoly prices that have to be paid 
in industrialised countries. Brazil is now spending just over 
US$3,000 per patient per year. Thanks to hard bargaining with the 
companies, the price will fall further. These figures contrast 
sharply with the US$10,000 cost per patient in the USA. 

Why can Brazil produce or import low-cost generic versions of some of 
the drugs that are so expensive in rich countries? The answer is sim-
ply that Brazil did not adopt pharmaceutical patenting until 1996. It 
could therefore legally produce equivalents of expensive medicines 
patented before that date in the industrialised countries, or import 
them from India, which also did not have patenting on pharmaceutical 
products. However, both countries are now obliged by the TRIPS agree-
ment to provide patent terms of at least 20 years for all products 
and processes. If TRIPS had been agreed just a few years earlier, 
thousands of Brazilians with AIDS would not have had access to treat-
ment and would be dead today. This dramatically illustrates the pub-
lic health problems that will flow from excessive patent protection 
in developing countries. 

Strengthening the public-health safeguards

It is true that the TRIPS Agreement does contain some important hard-
won public-health safeguards. It is vital that the TRIPS Council de-
fends the rights of governments to use these, and ensures that a pro-
public-health interpretation of the Agreement prevails. But the safe-
guards are insufficient and need to be strengthened if governments 
are to feel safe from the threat of legal challenge or trade sanc-
tions. 

While in principle the safeguards give governments the right to over-
ride patents in the interests of public health through such means as 
compulsory licensing, in practice it is extremely difficult for 
poorer countries to make use of these. It is significant that not one 
developing country has issued a compulsory licence for medicines us-
ing the TRIPS safeguards.

First, the provisions are hedged with conditions that make them dif-
ficult to operate, especially for poorer countries. Moreover, poorer 
countries often lack the legal resources to interpret and implement 
the agreement in favour of public health and development objectives. 

Second, powerful companies and rich countries use this legal ambigu-
ity in TRIPS to interpret the rules in their own interests, and to 
limit the use of the public interest safeguards. While the 39 pharma-
ceutical companies recently dropped their case against the South Af-
rican government, this was an example of the kind of corporate bully-
ing to which countries can be subjected when they seek to use TRIPS-
compliant provisions, such as parallel importing, in the interests of 
public health. 

The US administration's decision to take Brazil to the WTO disputes 
settlement panel, is designed to deter other countries from following 
Brazil's example and starting to question drug patents. The action 
sends a clear message to other developing nations such as India and 
Argentina, that the US will take firm action on any apparent devia-
tion from the TRIPS-mandated levels of protection, for all kinds of 
intellectual property. The US has also used the threat of trade sanc-
tions against India, the Dominican Republic, and Egypt to enforce 
TRIPS-plus measures.

Developing countries need a permanent guarantee that that they can 
put the public health and welfare of their citizens before private 
patent rights, without having to face these kind of legal pressures 
or the threat of trade sanctions. To achieve this the public-health 
safeguards need to strengthened.

The South African case 

The South African case provided a graphic illustration of the problem 
of excessive prices of patented medicines and the vital role played 
by generic competition in reducing these prices. The US-patented 
price for triple therapy for HIV/AIDS is approximately US$ 10,000 per 
person per year. As a result of growing public concern about the 
harmful effects of patents, and because of the presence of cheaper 
generic competition, the large companies recently cut their prices to 
African governments to around US$ 1,000 per person per year. But this 
was still more than three times higher than the cheapest offer from 
the Indian generic company, Aurobindo, of US$ 295 per person per 
year. The offers from generic companies have played a vital role in 
bringing down patented prices. But the effects of TRIPS in India and 
elsewhere will mean that this important source of generic competition 
will disappear for new medicines. Oxfam believes that the TRIPS 
Agreement needs to be revised in order to allow market forces to 
lower the high price of patented medicines through generic competi-
tion.

The case for special treatment for developing countries

TRIPS will largely benefit the big Northern-based transnational cor-
porations where pharmaceutical innovation is concentrated, not poorer 
countries which are principally importers of modern technology. For 
the latter, TRIPS will raise the cost of protected and imported tech-
nologies such as medicines. It will also reduce their scope to pro-
duce cheaper generic equivalents for their own consumption and export 
to other poorer countries.

Yet industrialisation usually relies on reproducing the technologies 
of the more advanced companies. Patenting only becomes of interest to 
a country when it has developed the capacity to innovate. Many Euro-
pean countries, including Switzerland, home of many innovative phar-
maceutical companies, resisted providing pharmaceutical product pat-
ents until their industries had reached a certain degree of develop-
ment. France introduced patent products in 1960, Germany in 1968, Ja-
pan in 1976, Switzerland in 1977, and Italy and Sweden in 1978. 

Advocates of TRIPS argue that the costs of strengthened patent pro-
tection are outweighed by the benefits of increased foreign invest-
ment in developing countries. But this is an assumption based on lit-
tle if any evidence. Nor will strengthened patent protection do much 
to promote innovation in poorer countries, since the main constraint 
on innovation is the lack of industrial and technological capacity, 
not weak patent protection.

For these reasons, Oxfam is arguing for longer transition periods for 
developing countries to comply with TRIPS, based on their attainment 
of development milestones rather than arbitrary dates. This would 
free them from the administrative costs of implementing TRIPS and en-
able them to produce or import cheap generics without having to issue 
compulsory licences or risk the threat of legal action. 

Will changing WTO TRIPS rules reduce R&D?

Pharmaceutical companies and Northern governments have repeatedly ar-
gued that strong patent protection in developing countries will in-
crease R&D into neglected diseases which afflict poor people. The 
lack of R&D into these diseases is certainly a serious problem. Pneu-
monia, diarrhoea, tuberculosis, and malaria - a group of diseases 
that claim approximately 11 million people every year mostly in de-
veloping countries - account for less than one per cent of the global 
health research budget. In contrast, diseases which primarily affect 
the rich world account for 85 per cent of global drugs sales, and are 
consequently the target for the bulk of R&D spending.

Strengthening patent protection in developing countries will not 
change this basic market reality. Simply stated, purchasing power in 
developing countries will remain too small, even with longer patent 
protection. The entire African market, for example, represents only 
one per cent of the multinational pharmaceutical companies' sales. 
This is why increased public investment will be needed to correct the 
current imbalance in R&D. 

The drug companies also justify TRIPS by arguing that strengthened 
patent protection is needed to reward R&D. But the minimum 20-year 
period required by TRIPS is arbitrary, and could be reduced in devel-
oping countries without prejudice to R&D. Moreover, pharmaceutical 
R&D is not as costly as often claimed. Evidence presented by a local 
campaign group, the Treatment Action Campaign, to the South African 
courts exploded the myth that strong patent protection is needed to 
recoup the costs of R&D. It showed that a large proportion of 
HIV/AIDS drugs were developed with funding by public money. [2] More-
over, company calculations of the cost of R&D often include research 
into copycat drugs rather than therapeutic breakthroughs, market re-
search costs, and the opportunity cost of capital, while also gloss-
ing over the tax benefits involved. [3]

Do voluntary initiatives and tiered pricing help?

In response to rising public concern about the harmful impact of pat-
ents on poor people's access to medicines, pharmaceutical companies 
have tried to stem the damage to their reputations by increasing vol-
untary initiatives such as donations, discounts, and tiered-pricing 
arrangements. These initiatives are a welcome way of helping allevi-
ate some of the problems of access to medicines, and an important 
recognition by companies that price does affect access.

Nevertheless, reliance on these schemes leaves governments dependent 
on companies' charity, providing only an adhoc, temporary, and dis-
ease-specific approach to the problem. Nor do these schemes necessar-
ily offer the best obtainable price. As such, they do not offer a 
systematic or sustainable solution to the problem of affordability. 
They should not therefore be seen as substitutes for the use of com-
pulsory licensing, parallel importing, or, most importantly, reforms 
to the TRIPS Agreement which aim to reduce price through generic com-
petition. Moreover, companies need to be aware that the media and the 
public will ultimately judge them on the basis of their net develop-
ment impact, which includes their influence over patent rules.

Corporate influence and big-stick trade diplomacy

The WTO is a multilateral forum which ought to reflect the public in-
terest of all its members. Yet it is being used to advance the pri-
vate interests of extremely powerful corporations, with adverse im-
plications for public health. [4] The TRIPS Agreement produced revo-
lutionary changes in intellectual property rules with minimal par-
ticipation and understanding by developing countries and, until re-
cently, almost no public debate. This is why Oxfam and many NGOs are 
now calling for the TRIPS Agreement to be opened up to critical pub-
lic debate. It is also why these NGOs are increasingly focussing 
their campaigns directly at the large companies.

US, European, and Japanese drug companies and other businesses played 
a particularly significant role behind the scenes of the 1986-94 Uru-
guay Round negotiations. The recommendations of the US industry's Ad-
visory Committee for Trade Negotiations and the Intellectual Property 
Committee were fundamental to the development of the US strategy for 
intellectual property protection. Edmund Pratt, Chief Executive Offi-
cer of Pfizer, was quoted at the time as saying, 'Our [the indus-
try's] combined strength enabled us to establish a global private 
sector-government network which laid the groundwork for what became 
TRIPS'. 

These committees convinced the US government that the 'theft' of US 
technology and profit could be halted only by creating global rules, 
enforced by the threat of trade sanctions. The US companies skill-
fully enrolled their European and Japanese counterparts to put pres-
sure on the other rich-country governments, which together dominated 
the negotiations.

By contrast, developing countries had very little understanding of 
the implications of TRIPS and were for the most part excluded from 
many of the decisive negotiations in the WTO. The USA also used bi-
lateral pressure to break developing-country resistance to TRIPS. Un-
der the influence of the corporate lobby, it developed and used the 
Special 301 provisions of its trade legislation to target developing-
country leaders such as India and Brazil. This legislation allows the 
US government to take retaliatory action against countries that fail 
to give what the USA considers to be adequate protection to intellec-
tual property. This can go far beyond the requirements even of the 
TRIPS Agreement. The legislation also makes resistance to the USA in 
a multilateral forum one of the conditions that could lead to a Spe-
cial 301 investigation. [vi] The US government also placed conditions 
on access to its trade preferences programme (GSP) on adequate intel-
lectual property protection.

The failure of the TRIPS negotiations to meet the minimum conditions 
for democratic negotiation may well prove to be the Agreement's 
Achilles heel. Increasing numbers of people are questioning why the 
WTO, an organisation charged with developing rules for 'free trade', 
is providing a legal framework for the development of effective cor-
porate monopolies. There is increasing concern that its 'one size 
fits all' approach is prejudicial to welfare and innovation in many 
developing countries and in certain industries and sectors. Distin-
guished scientists have argued that the limited benefit to innovation 
arising from stronger global patent protection does not justify the 
health risks. Thousands of NGOs signed a statement before Seattle 
calling for TRIPS to be removed from the WTO altogether. 

What is certain is that TRIPS will need serious revision if it is to 
stem the growing public backlash against patents. But the USA and 
other rich countries are unlikely to agree to reform and to change 
their ways unless public pressure is strong enough to counterbalance 
the powerful corporate lobby. Concerted public campaigning helped 
persuade the USA to refrain from exerting bilateral pressure against 
African countries trying to address the HIV/AIDS crisis. The question 
is whether public pressure can also stop it from using blocking tac-
tics in the WTO, and bilateral trade agreements to ratchet up IP pro-
tection outside the WTO.

Decision making in the WTO

The WTO has the power to change pharmaceutical patent rules for poor 
countries and to stop intimidation by rich countries and large compa-
nies. The TRIPS Council, which will hold a special session on health, 
comprises all WTO members. On the basis of a recommendation from the 
TRIPS Council, the Ministerial Conference of the General Council 
could adopt a formal, binding interpretation of the TRIPS Agreement, 
or change the rules. 

The formal WTO rules provide for one person, one vote, based on the 
universal participation of members in all meetings. Decisions are to 
be taken by consensus. That is reached when 'no Member, present at 
the meeting when the decisions are taken, formally objects to the 
proposed decisions'. If consensus should fail, the issue can be 
pushed to a vote. However, a majority vote has never been used in the 
WTO. Working by consensus is supposed to make decisions more accept-
able to all members. 

In practice, lack of consensus has meant that meant that the status 
quo prevails, and that WTO members have effectively abandoned much of 
their policy-making role to the dispute settlement body. Lack of con-
sensus can work in developing countries' favour when it prevents rich 
countries seeking to further strengthen intellectual property stan-
dards. But it has a negative effect when it allows rich countries to 
block pro-health and pro-development reforms to WTO rules. 

Oxfam believes that if the USA or other rich countries block propos-
als to interpret and reform patent rules in favour of public health 
at the special session, WTO members should push their proposals to a 
vote at the 4th Ministerial. The Ministerial Conference has the power 
to adopt binding interpretations or amendments of any of the multi-
lateral trade agreements.

Footnotes



[1] The law allows the government to require a company to manufacture 
a patented product locally. Where the patent holder does not do this, 
the Brazilian government reserves the right to issue a compulsory li-
cense which would allow a generic company to manufacture an equiva-
lent, or to import the patented product from another country where 
the price is cheaper. If the WTO panel rules against Brazil it will 
have to change the law or face trade sanctions. Changing the law will 
have a significant negative impact upon public health. It would limit 
the technology transfer necessary to build up a strong domestic phar-
maceutical industry, narrow the scope for reducing the foreign ex-
change cost of medicines, prevent the government from using parallel 
importation to gain access to cheaper medicines, and weaken the gov-
ernment's bargaining position over the high price of medicines. 

[2] See http://www.tac.org.za

[3] See Oxfam briefing paper, Implausible Denial: Why the Drug Gi-
ants'Arguments on Patents Don't Stack Up, April 2001. 

[4] Much of the evidence in this section comes from a paper by Peter 
Drahos written for an Oxfam International seminar, 'What Future for 
the WTO TRIPS Agreement', held in Brussels on 20 March 2001, and 
called 'Negotiating Intellectual Property Rights: Between Coercion 
and Dialogue'. 

[5] Edmund T.Pratt Jr., Pfizer Forum, 'Intellectual Property Rights 
and International Trade', The Economist, 27 May 1995, p.26 

[6] Under Special 301 a state can be identified as a priority foreign 
country if it is not 'entering into good faith negotiations; or mak-
ing significant progress in bilateral or multilateral negotiations'. 

This report was produced by the Policy Department of Oxfam (Great 
Britain) as part of the Cut the Cost campaign.

We would like to thank Médecins sans Frontières and the Treatment 
Action Campaign for their information and analysis.

--
[reproduced by C. Labadie 
mailto:CLabadie@t-online.de ]

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