Access to affordable life-saving drugs is a complex issue, which needs to be addressed further by all stakeholders involved in developing, providing and distributing such drugs.

The European Commission welcomes this conference and hopes that it may contribute to the debate on enhanced access to essential drugs.

During the forthcoming WTO Ministerial in Seattle, new subjects are on the agenda, such as environment, consumer health, food safety, biotechnology, competition and investment. However, the outcome of these negotiations is still unclear. Therefore, in this presentation I will limit myself to commenting on the TRIPs Agreement and its impact on development of new innovative pharmaceutical products and access to essential drugs.

The European Commission considers that there is a need to find solutions to the problems raised by stakeholders in this debate. The UN, national governments, international communities, the industry and NGOs should seek broad solutions going beyond the IPR system, in particular, by developing countries and the research based pharmaceutical industry should be pursued as well as enhanced technical assistance should be provided for by the European Union.

Before addressing some of the major points raised during yesterday’s session and in the roundtable discussions, I would like to remind you that new ground-breaking innovate drugs, in particular those to combat HIV, are developed and carried to the market by the pharmaceutical industry. It is seldom that government institution or non-profit research organisations develop these products and ensure their distribution. The Commission considers that complementary healthcare programmes should be developed and implemented by those developing the drugs in close co-operation with the countries, which need these pharmaceuticals.

It is true that most of the pharmaceutical research carried out to date has concentrated on diseases that occur in the developed countries. This could be a result of the low purchasing power and the extensive lack of intellectual property rights protection in developing countries. Today’s discussion shows that research based pharmaceutical companies are investing resources in developing new essential drugs.

Therefore, on a long-term basis, supportive sound investment climates in developing countries for pharmaceutical companies must be created, in order to provide the world population with more effective drugs, especially those most needed in the developing countries.

One of the instruments to create a sound innovative environment for new essential drugs is to ensure a high level of intellectual property rights protection in line with the provisions of the TRIPs Agreement.

Intellectual property rights are vital to correct the market failure of supply of essential drugs to developing countries and to create a growing market for drugs to combat life-threatening diseases. Allowing essential drugs to be excluded from patentability would be a short-sighted solution and would have serious long-term consequences.

Regarding patents influence on essential drugs prices, I would add that the majority of the drugs on WHO’s essential drugs list are not under a patent and thus the exclusion of theses drugs from patentability does not have any effect on the access to these drugs and the prices charged for them.

The Commission considers that due to the intellectual property rights’ regime it is possible for the pharmaceutical research based sector to charge variable prices in different countries ensuring that affordable medicine are available to developing countries. Without the IPR system it is most likely that one world price would be created for a single product without the possibility to distinguish between the user markets.

It is argued that an extension of the transitional period under TRIPs for developing and least-developed countries will facilitate the access to essential drugs allowing developing countries to adopt patent legislation providing for the extensive exclusions of essential drugs from patentability and diminishing the rights conferred by a patent. It is also stressed that parallel-importation and the use of compulsory licenses are means to achieving access to affordable essential drugs.

The deadline for implementing the provisions of the TRIPs Agreement expires for least-developed countries on 1 January 2006. Therefore, there is time to adopt the necessary patent legislation. Developing countries have already had a transitional period of five years to implement TRIPs and in relation to the product patent protection for pharmaceuticals the deadline expires on 1 January 2006. Technical assistance has been provided during this period and the EU will continue to make technical assistance available in the future.

As parallel-importation does not lead to the creation of new effective innovative products against diseases such as Malaria, TB and HIV, it is doubtful whether or not, on a long term basis, parallel-importation is actual beneficial to developing countries.

Regarding the use of compulsory licenses, Article 31 of TRIPs already allows the use of such licenses. Article 31 of TRIPs sets some very specific rules for how to use compulsory licenses. In this context, I would add that compulsory licenses must be considered on a case by case basis and that the proposed user must prove seek authorisation from the patent right holder on reasonable commercial terms. In any event, the patent right holder shall be paid adequate remuneration.

I would like to conclude by saying that the European Commission supports the establishment of well-balanced, sound contractual relationships between the pharmaceutical industry and representatives of developing countries in order to ensure affordable prices on essential drugs. The European Commission also urges the pharmaceutical industry to engage in enhanced healthcare activities supporting the widespread and correct use of essential drugs.

The European Commission considers that technical and financial assistance should be provided for developing countries in order to enhance their negotiating position and to ensure that the pharmaceutical industry engages in providing additional healthcare programmes and further research activities in diseases relevant to developing countries. In this respect, diseases such as Malaria, TB and HIV should be priorities.

Recognising the need to further explore these issues, the Commission supports dialogue with all stakeholders in this debate and it promises to look into any existing document on this matter that participants would wish to provide to us.