WTO Makes Permanent a Way to Help Poor Countries Gain Access to Generics via Compulsory Licenses

The World Trade Organization (WTO) on Monday officially amended its Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement to allow developing countries facing public health problems and lacking the capacity to produce generic drugs the ability to obtain such medicines from third country producers under "compulsory licensing" arrangements. 

The amendment, which is the first since TRIPS was created in 1995, provides a permanent legal basis for both potential exporters and importers to adopt legislation and establish a way for countries with limited or no production capacity to import affordable generics from countries where pharmaceuticals are patented.

The amendment also allows exporting countries to grant compulsory licences to generic suppliers exclusively for the purpose of manufacturing and exporting needed medicines to countries lacking production capacity, which is a departure from the days when most medicines produced under compulsory licences were only provided to the domestic market in the country where they were produced.

The agreement follows fierce negotiations in October 2015, pitting the EU and others against the US, Australia, Canada, Switzerland and US industry group PhRMA – all of which opposed making this amendment permanent for least-developed countries.

But now two-thirds of WTO members have ratified the amendment, which formally brings it into the TRIPS agreement.

“The WTO Secretariat has received in recent days notifications from five members that they have ratified the protocol amending the WTO TRIPS Agreement. These notifications — from Burkina Faso, Nigeria, Liechtenstein, the United Arab Emirates and Viet Nam — brought to two-thirds the number of WTO members which have now ratified the amendment. The two-thirds threshold was needed to formally bring the amendment into the TRIPS Agreement,” WTO explained on Monday. “Legal certainty that imports can be brought in satisfactory quantities, helps most vulnerable populations.”

Margaret Chan, WHO’s Director General, praised the move in a video: “We are a long way from reaching global equity in access to essential medicines, especially at a time when the costs of some new treatments are unsustainable, even in the richest countries in the world.”

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