At last the World Trade Organisation extracted an accord on last Saturday on the issue of access of cheaper drugs to the poor countries to fight health emergencies. The deal was almost finalised by the US, Brazil, India, Kenya and South Africa on last Wednesday and was to be taken up in the General Council but was halted for a day as Argentina, Philippines and some other countries wanted to make statements of their interpretations of the deal. The US has, however, rejected these demands fearing they could unravel the whole deal. Thus, it managed to get what it wanted on Saturday making all 146 countries agree to the Draft Chairman's Statement (DCS). The prime objective of the deal is to allay fears of the concern of the US MNCs that waiving of patents under compulsory licence could be abused for commercial gains by the generic producers of developing countries. WTO countries, including Argentina and Philippines, had earlier indicated their support to the pact finalized by the US and the four countries. Their indicated support is in the background that Brazil and India are major producers of generic drugs while Kenya and South Africa are countries most affected by diseases like AIDS and malaria. WTO rules allow developing countries with no own domestic drug industry, to override patents and issue compulsory licenses to generic manufacturers during health emergencies.
The agreement now reached based on DCS in the WTO General Council is designed in such a way that generic manufacturers of developing countries would find it very difficult to comply with its provisions. Three out of the four provisions set out on page 2 of the DCS impose too much of uncertainty that the transaction cost will make access to medicine unviable for a small market. Firstly, the generic manufacturer cannot ascertain whether the importing country will be able to establish before the TRIPS Council that it has insufficient or no manufacturing capacities in the pharmaceutical sector. Secondly the provision 3 allowing any member to bring any matter to the Council can be used as a tool by the brand name companies against generic exporters by bringing frivolous complaints. When there is a mechanism under the Dispute Settlement Body in WTO to deal such matters, India should not have agreed to such a blatant provision on Wednesday. Again the "Best Practices Guidelines" in the DCS requiring special colouring and shaping of the products of generic companies are unfair as that could add to additional costs of production. Most of the generic manufacturers work on large volumes and small margins unlike the brand name companies who operate on huge margins and small volumes. Therefore, the issue of product differentiation should be restricted to no use of brand names and same packaging materials of the brand companies. Indian Pharmaceutical Alliance representing India's leading generic companies, is obviously not very happy about the accord while IDMA with members of medium and small drug companies is silent. As these unacceptable provisions contained in the agreement have disappointed countries with generic manufacturers, member countries should have rejected the proposal and alternate ways to achieve the spirit of Doha Declaration should have been pursued.