Impact Of Trips Agreement On Developing Countries

Similarly, changes to national legislation will be required in potential exporting countries. Compulsory licences are granted for reasons provided by national legislation. The supply of export markets is not a recognized reason in most national legislation.16 In addition, in the implementation of Article 31.f of the TRIPS agreement, WTO members granted 17 compulsory licences for the “predominant” supply of the internal market. When a company receives a request for delivery from a foreign country under paragraph 6, it cannot obtain a compulsory licence exclusively for export, unless national legislation has been amended accordingly. It is questionable to what extent governments will be prepared to initiate the complex process of amending patent law, particularly on the basis of an interim waiver. This decision does not prevent developed countries from exporting generic drugs under the system, but it is not known how their governments would react if they were asked to amend their legislation and grant compulsory licences for the supply under paragraph 6. Indeed, most observers expect that the major generic drug manufacturers in developing countries (such as India, China, Brazil, Thailand and South Africa) will carry out this production and export.18 For example, the adopted system recognizes the possibility (in full compliance with the TRIPS agreement) of granting a compulsory licence for the importation of a patented drug. However, the problem is that many developing countries provide for compulsory licensing for the manufacture of patented substances and not for importation. In order to find a solution in paragraph 6, these developing countries would therefore have to amend their national patent laws accordingly. This may be unnecessary if national laws contain provisions for the non-commercial use by the government of patented inventions that allow either local production or importation.15 As Maskus (2003, Op. cit.) has found, although the overall needs in poor countries are immense, “even though some poor countries have pooled their claims on a particular drug in a trade agreement under this exception. , the scale may still be too low to become attractive to potential suppliers…

Since eligible import markets will not be large in very small countries, generic drug manufacturers may not be interested in producing these small quantities and waiting for economies of scale. One of the main concerns of developed countries during the negotiations on the decision was to divert products exported to rich countries11.11 The decision provides that eligible importing countries take all appropriate measures to the extent of their administrative capacity and the risk of misuse of power to prevent the re-export of products actually imported to their territory under the system. In the event that an eligible importing country, which is also a member of a developing country or least developed member of a country, has difficulty implementing this provision, members of developed countries, on request and on mutually agreed terms, provide technical and financial cooperation to facilitate its implementation. In addition, members ensure that effective legal means to prevent the importation and sale of manufactured and reoriented products to their markets under the system provided for by this decision are manufactured on their territory and redirected to their markets using funds already available under the TRIPS agreement. If a member feels that such measures are insufficient for this purpose, the matter may be reconsidered at the request of that member in the TRIPS Council.