Access to medicines and TRIPS flexibilities: Chronology of WHO Debate
Introduction
Since 1994 (and the coming into force of the TRIPS (Trade Related Intellectual Property Rights) Agreement) there has been a dramatic strengthening of intellectual property (IP) protection with protection for product as well as process, increasing duration of protection and powerful new sanctions to encourage countries to adopt the new standards.
The background to TRIPS is revealing.
Drahos (2002) recalls that a study undertaken by WIPO in 1988 for the negotiating group that was dealing with TRIPS in the Uruguay Round revealed that, of the ninety-eight Members of the Paris Convention for the Protection of Industrial Property (Paris Convention), forty-nine excluded pharmaceutical products from protection... These numbers include developed as well as developing countries.
Likewise Scherer and Watal (2001) point out that many of today’s developed countries excluded pharmaceutical products from patent protection until quite recently: Germany until 1968; Switzerland until 1977; Italy until 1978; Spain until 1992; Portugal until 1992; Norway until 1992; Finland until 1995, and Iceland until 1997.
Drahos (2002) points out that IPR laws in most developing countries strongly reflect their origins in the IP laws of the empires (British, Spanish, etc) to which they may have belonged.
The revolution in IP regulation begins in the 1970s with two counterposed influences: first, the increasingly confident claims of the Non-Aligned Movement (NAM) and the G77, expressed most clearly in the call for a New International Economic Order (NIEO); and second, countering this, was the rising agitation of many of the largest the transnational corporations (TNCs), led by Pfizer among others, for much tighter control over (what they regarded as) counterfeit (but which could also have been regarded as completely legal diffusion of technology).
The NIEO was conceived at the NAM Conference in Algiers in September 1973 and subsequently adopted at a Special Session of the UN General Assembly (UNGA (1974)) in April 1974 sponsored by the Group of 77 (G-77) and opposed by the United States and a small group of advanced industrialized countries:
However, the remaining vestiges of alien and colonial domination, foreign occupation, racial discrimination, apartheid and neo-colonialism in all its forms continue to be among the greatest obstacles to the full emancipation and progress of the developing countries and all the peoples involved. The benefits of technological progress are not shared equitably by all members of the international community.
Drahos (2002) recalls that during the 1960s and 1970s, developing countries began to ask whether the prevailing standards for IP protection were “tilted too far towards the appropriation of knowledge rather than its diffusion? Developing countries sought adjustments to both the international copyright regime and the international patent regime. In both cases they were unsuccessful”.
Driven by the increasing activism of the larger TNCs the US and EEC countries tried to incorporate an ‘anti-counterfeiting code’ into the General Agreement on Tariffs and Trade (GATT) in the Tokyo round of GATT negotiation in 1978. They failed at this time, through the opposition of developing countries (Adede 2003).
Wadlow (2007) comments that the proposal for an ‘anti-counterfeiting code’ to be embedded in the GATT represented a significant exercise in “forum shifting”, away from the World Intellectual Property Organisation (WIPO) into the GATT, and later the WTO.
Drahos (2002) comments that in UN fora such as WIPO developing country blocs exercised significant voting power but in the GATT “the United States was the single most influential player. Largely due to the efforts of the United States and U.S. big business, the Ministerial Declaration which in 1986 launched the Uruguay Trade Round listed the trade-related aspects of intellectual property rights as a subject for negotiation”.
The shift to the GATT reflected a view among the TNCs, led by Pfizer and speaking through the International Anticounterfeiting Coalition (formed in 1979) that renegotiation of the Paris Convention under WIPO would never deliver the level of IP protection they wanted.
The revision of the Paris Convention that had begun in 1980 was never completed. In the eyes of such key industry players as Pfizer, WIPO had failed to secure the higher patent standards that the large pharmaceuticals players wanted. Even more dangerously, countries such as India, Brazil, Argentina and Mexico had shown that developing countries could lower standards of patent protection and still have a thriving generics industry. In the words of Lou Clemente, Pfizer’s General Counsel, “Our experience with WIPO was the last straw in our attempt to operate by persuasion.” Drahos (2002)
When the United States began to push for the inclusion of intellectual property in a new round of multilateral trade negotiations at the beginning of the 1980s, developing countries resisted the proposal. The countries that were the most active in their opposition to the U.S. agenda were India, Brazil, Argentina, Cuba, Egypt, Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia. After the Ministerial Declaration of 1986 which opened the GATT Uruguay Round, these countries continued to argue for a narrow interpretation of the Ministerial mandate on the negotiation of intellectual property. Drahos (2002)
Breaking the resistance of these “hard liners” was fundamental to achieving the outcome that the United States wanted. Special 301 was swung into action in the beginning of 1989. When the USTR announced the targets of Special 301, five of the ten developing countries that were members of the hard line group in the GATT found themselves listed for bilateral attention. Brazil and India, the two leaders, were placed in the more serious category of the Priority Watch List, while Argentina, Egypt and Yugoslavia were put on the Watch List. U.S. bilateralism was not confined to these countries. By 1989 USTR fact sheets were reporting other successes: copyright agreements with Indonesia and Taiwan, Saudi Arabia’s adoption of a patent law and CoIombia’s inclusion of computer software in its copyright law. Opposition to the U.S. GATT agenda was being diluted through the bilaterals. Each bilateral the United States concluded with a developing country brought that country that much closer to TRIPS (Drahos (2002) )
Presumably it was evident during the negotiation of TRIPS that the US and TNCs were not going to achieve everything they wanted through the WTO and so TRIPS plus provisions were included in the NAFTA (North American Free Trade Agreement) which was also concluded in 1974 and which heralded a parallel drive, through the preferential trade agreements (PTA) pathway, for higher levels and wider scope of protection. Since the Cancun Ministerial Conference (2003) of the World Trade Organisation (and the deadlock in WTO negotiations) there has been a redoubling of effort into the negotiation of PTAs (such as the proposed Trans Pacific Partnership Agreement (TPPA), the US-EU Transatlantic Trade and Investment Partnership (TTIP), EU-India FTA) and tighter IP protection has been a constant feature of these.
Proponents for increasing IP protection, in particular the research based pharmaceutical manufacturers (RBPM) and their nation-state proxies, argue that it is necessary to support innovation. (Countries such as the US which have exported their manufacturing jobs are increasingly dependent on the export earnings associated with monopoly pricing.)
Opponents to high levels of IP protection argue that:
- monopoly pricing (under patent protection) renders medicines unaffordable for (especially for poor people and low and middle income country (L&MIC) governments); the abuse by RBPMs of their monopoly pricing power (for example with the prices for AIDS drugs determined on the basis of maximising revenues (as when revenue is maximised by higher prices for a smaller number of wealthier families) rather than ensuring access to treatment);and
- funding R&D on the basis of anticipated profit distorts investment in new medicines; manifest in lack of investment in diseases which mainly affect L&MICs and over investment in me-too modifications, disease-mongering therapeutics, and marginal end of life benefits.
- much of the profit garnered through monopoly pricing is misused in marketing with consequences in overuse, irrational use and antibiotic resistance.
The battle is being fought out in several different domains.
The RBPMs have sought to shore up their monopoly pricing powers by lobbying for higher levels of IP protection in PTAs and by attacking the use of generics, including through seizures in Europe, trade sanctions against countries using compulsory licensing and propaganda which conflates questions of IP with issues of quality, safety and efficacy (most notably through the International Medical Products Anti-Counterfeiting Taskforce (IMPACT)).
On the public health side there has been resistance to these strategies including defence of the use of generics (including the full utilisation of the flexibilities of the TRIPs agreement) and a drive to de-link R&D funding from sales revenues (and therefore IP protection), in particular through alternative ways of funding pharmaceuticals R&D.
These forces are engaging at different levels (global, regional, national), in different institutional settings (eg trade negotiation, public health conferences) and in different countries (eg USA, cf Thailand).
This note reviews decision making in and around the WHO with a focus on IP and access to treatment.
IP and access to treatment: the story of ‘TRIPS flexibilities’ and policy coherence
The TRIPS Agreement was adopted in 1994. This introduced longer periods of patent protection and required patents on product as well as process. Developing countries were given a 10 year grace period (to 2005) to bring their patent laws into conformity with TRIPS. TRIPS establishes certain principles which have to be reflected in patent law. There is some flexibility regarding details.
Resolution WHA49.14 (May 1996) on the Revised Drug Strategy requests the DG to “report on the impact of the work of the World Trade Organisation (WTO) with respect to national drug policies and essential drugs and make recommendations for collaboration between WTO and WHO as appropriate”.
Resolution WHA52.19 (May 1999), again on the Revised Drug Strategy, requests the DG to assist members (at their request) in developing policies and regulations which address the implications for pharmaceutical and health policy objectives from trade agreements and assist countries to ‘maximize the positive and mitigate the negative impact of those agreements’.
In 1997 a court case was brought by 30 international pharmaceutical companies, see CPT report (Consumer Project on Technology nd) against the government of South Africa alleging that its use of parallel importing was illegal in terms of South African legislation (as adopted to conform to TRIPS). At this time the RBPMs were selling a course of (branded) AIDS treatment in South Africa for $10,000 per year, while Cipla was selling such a course (generics) to MSF for $350 per year. Between 1998 and May 2001 the South African Treatment Action Campaign (Heywood 2009) generated national and international support for the South African government’s position, demanding access to treatment and in 2001 the US government withdrew its political support for the drug companies (after ACTUP highlighted the issues in the context of the Al Gore presidential campaign). In May 2001 the drug companies withdrew their suit and agreed to pay the South African government’s costs.
During the controversy there was a policy debate around the use of TRIPS flexibilities (such as compulsory licensing, parallel importation and price controls) versus drug donations, differential pricing and philanthropy.
In April 2001 Dr Brundtland (WHO DG) co-hosted a workshop in Oslo on differential pricing as a solution to price barriers to treatment in low income countries (WHO, WTO et al. 2001); essentially seeking encourage a more charitable approach by the RBPMs.
However, in December 2001 the Ministerial Council of the WTO, meeting in Doha, adopted the Doha Declaration on the TRIPS Agreement and Public Health (WTO Ministerial Council 2001) which stated (para 4):
We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all.
In this connection, we reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.
The Ministerial Declaration from the meeting declared (para 6):
We recognize that under WTO rules no country should be prevented from taking measures for the protection of human, animal or plant life or health, or of the environment at the level it considers appropriate, subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, and are otherwise in accordance with the provisions of the WTO Agreements.(WTO Ministerial Council 2001).
In June 2001 one of the Working Groups of the Commission on Macroeconomics and Health (2001) published a paper (Scherer and Watal 2001) exploring the use of compulsory licenses, parallel imports, and price controls, for ensuring affordable access to patented medicines in developing countries. It also reviewed the role of corporate charity (drug donations by research-based pharmaceutical companies) and the role of aid through intergovernmental and nongovernmental organizations.
In 2002 WHO and WTO issued a report (2002) on the intersections between trade and public health which provides clear descriptions of TRIPS flexibilities in the context of a joint project of supporting ‘policy coherence’ across trade and health.
In May 2003 the debate over IP, pricing and access found its way onto the WHA56 Agenda with Secretariat report, A56/17. The WHA adopted resolution WHA56.27 which urged member states (MSs) inter alia to:
- 1(1)…reaffirm that public health considerations are paramount in pharmaceutical policies
- 1(2)…adapt national legislation to enable the full use of TRIPS flexibilities;
- 1(3)…maintain efforts to operationalize paragraph 6 of the Doha Declaration (enabling compulsory licensing for export);
- 1(4)…encourage research on diseases that affect developing countries;
and requested the DG inter alia to:
- 2(1)…promote technology transfer;
- 2(2)…establish an expert inquiry into IPRs, Innovation and Public Health;
- 2(3)…monitor and analyse trade agreements.
“…to collect data and proposals from the different actors involved and produce an analysis of intellectual property rights, innovation, and public health, including the question of appropriate funding and incentive mechanisms for the creation of new medicines and other products against diseases that disproportionately affect developing countries…”
However, the terms of reference promulgated by Dr Brundtland following the Assembly effectively restricted the Commission to questions regarding innovation and the broader remit of ‘an analysis of intellectual property rights, innovation, and public health’ was reduced.
The first meeting of the Commission took place on 5-6 April 2004 (see) and the report of the Commission (Commission on Intellectual Property Rights Innovation and Public Health 2006) was submitted to EB117 (Jan 2006).
Despite the narrowing of it terms of reference, the Commission did consider the TRIPS Agreement in relation to treatment access and reaffirmed the flexibilities inherent in the Agreement.
The TRIPS agreement allows countries a considerable degree of freedom in how they implement their patent laws …
… countries may devise their patent systems to seek the best balance, in their own circumstances, between bene?ts and costs. Thus developing countries may determine in their own ways the de?nition of an invention, the criteria for judging patentability, the rights conferred on patent owners and what exceptions to patentability are permitted, provided these are consistent with the relevant articles of TRIPS (for WTO Members). Under TRIPS they may also exempt from patentability, should they so wish, therapeutic methods for the treatment of humans and new indications of known products which amount to a therapeutic method.
As also recognized in the Doha Declaration, they may – on various grounds – provide for measures such as parallel imports, government use and compulsory licensing.
However, an emerging development is the growing number of bilateral and free trade agreements which include higher standards of protection that erode these ?exibilities.
(p21)
4.13 … Developing countries should provide in their legislation for the use of compulsory licensing provisions, consistent with the TRIPS agreement, as one means to facilitate access to cheaper medicines through import or local production.
4.14 Developed countries, and other countries, with manufacturing and export capacity should take the necessary legislative steps to allow compulsory licensing for export consistent with the TRIPS agreement.
4.15 The WTO decision agreed on 30 August 2003, for countries with inadequate manufacturing capacity, has not yet been used by any importing country. Its effectiveness needs to be kept under review and appropriate changes considered to achieve a workable solution, if necessary
(P120)
4.20 Developing countries need to decide in the light of their own circumstances, what provisions, consistent with the TRIPS agreement, would bene?t public health, weighing the positive effects against the negative effects. A public health justi?cation should be required for data protection rules going beyond what is required by the TRIPS agreement. There is unlikely to be such a justi?cation in markets with a limited ability to pay and little innovative capacity. Thus, developing countries should not impose restrictions for the use of or reliance on such data in ways that would exclude fair competition or impede the use of ?exibilities built into TRIPS.
4.21 In bilateral trade negotiations, it is important that governments ensure that ministries of health be properly represented in the negotiation, and that the provisions in the texts respect the principles of the Doha Declaration. Partners should consider carefully any trade-offs they may make in negotiation. Bilateral trade agreements should not seek to incorporate TRIPS-plus protection in ways that may reduce access to medicines in developing countries.
(P126)
4.24 Countries should provide in national legislation for measures to encourage generic entry on patent expiry, such as the “early working” exception, and more generally policies that support greater competition between generics, whether branded or not, as an effective way to enhance access by improving affordability. Restrictions should not be placed on the use of generic names.
4.25 Developing countries should adopt or effectively implement competition policies in order to prevent or remedy anti-competitive practices related to the use of medicinal patents, including the use of pro-competitive measures available under intellectual property law.
4.26 Bilateral trade agreements should not seek to incorporate TRIPS-plus protection in ways that may reduce access to medicines in developing countries.
The Commission’s report was considered at WHA59 (May 2006) which (in Resolution A59.24, p32) appointed an intergovernmental working group (IGWG) “to draw up a global strategy and plan of action in order to provide a framework based on the Commission’s recommendations, with a focus on research and development relevant to diseases that disproportionately affect developing countries.” The GSPOA developed by the IGWG and subsequently amended and adopted by the Assembly focuses largely on innovation and the financing of R&D. There are a few references to TRIPS flexibilities, all hedged with qualifications.
However, the utilisation of TRIPS flexibilities and TRIPS plus in free trade agreements remained on the agenda as in May 2004 with Resolution WHA57.14 (P17) ‘Scaling up treatment and care within a coordinated and comprehensive response to HIV/AIDS’ which in para 2 urges member states, as a matter of priority: … ‘(6) to take into account in bilateral trade agreements the flexibilities contained in the Agreement on Trade-related Aspects of Intellectual Property Rights and recognized by the Declaration on the TRIPS Agreement and Public Health adopted by the WTO Ministerial Conference (Doha, 2001) …’
Meanwhile there was further progress on the wider issue of ‘policy coherence’ across trade and health as broached in the 2002 WHO/WTO report. In October 2004 SEARO hosted an inter-regional workshop on trade and health which explored the full range of issues associated with trade health policy coherence including extended treatments of TRIPS and treatment access. This workshop laid the ground work for what became WHA59.26 on Trade and Health.
The first version of what became WHA59.26 was tabled at the EB meeting (EB116 in May 2005) as a response to a Secretariat report on trade and health (EB116/4). The report commenced with a review of previous relevant resolutions, most of which were centred on access to medicines; then a review of the WTO and its agreements; and then a review of the key issues at the trade health interface. The report then reviewed work which had been undertaken by WHO on trade and health, including: analysis and research, tools and training materials, technical support and capacity building. The report highlighted the need for policy coherence and provides detailed guidance regarding how this might be achieved.
There was a warm discussion of the report at EB116 (see report from page 41); most of the contributions commended it but the US (observer) criticised the report as superficial and accused the Secretariat of being ‘against industry, free trade, and intellectual property’. Following this discussion a draft resolution was tabled by Thailand and 13 other member states. This resolution was subject to vigorous discussion and in the end the Chair elected to defer further consideration to EB117 in Jan 2006.
A revised resolution was submitted to the EB in January 2006 and was adopted without discussion (EB117.R5). It had already been negotiated by certain member states prior to its being introduced.
The draft resolution (EB117.R5) was forwarded to the WHA in May 2006 where, after a minor amendment it was adopted (as WHA59.26). During the debate the draft resolution was supported by all of those who spoke although the USA “cautioned the Secretariat on its technical competency to advise Member States accurately on the potential implications of trade rules from a public health perspective. Any information on best practices in trade negotiations that WHO provided had to be unbiased and evidence-based and had to be cleared with WTO and WIPO. To the extent that such work did fall within the Secretariat's mission, mandate and expertise, it must provide the Member States with information that was accurate and fairly represented the different views of Members.”
It is worth noting that there is no mention of intellectual property in WHA59.26 (p37), apparently in deference to the opposition of the USA to any reference to the impact of intellectual property rights on access to health care.
A mix of activities, some driven from Geneva and from some of the regional offices, followed the passing of A59.26 although it is not clear that all of them were a consequence of the resolution. The WHO Secretariat had been working with the WTO Secretariat on trade and health issues since well before A59.26 and this cooperation and with WIPO has continued. What it has achieved in terms of ensuring treatment access is less clear. However, a number of incidents following the adoption of WHA59.26 give some insight into the behind the scenes pressures.
In March 2006 a senior and respected WHO officer, Dr William Aldis, was recalled from Bangkok for advising Thailand to be cautious about the implications for access to medicines of a mooted US-Thai free trade agreement (see report in Asia Times Online). The story of the recall of Dr Aldis tells us a bit about the willingness of the US to exert pressure on the DG to prevent criticism of its trade policies. It has been suggested that the leaking of the details of the US complaint, allegedly by a US official one month after the adoption of WHA59.26, was a deliberate warning to other WHO employees.
Similarly US criticism of the Musungu Oh research paper on the use of TRIPS flexibilities and prepared for the CIPIH, tells us something further about the pressure that the US is able to exert over WHO, in this case demanding that the DG censor any criticism of its trade policies from within the Secretariat. Clearly, the status of the US as a major donor to WHO lends weight to such demands. While the CIPIH study had been publicly available and widely discussed from March 2005 it was not until August 2006 (three months after the adoption of WHA59.26) that a senior US official Dr William Steiger wrote to the (interim) DG demanding more effective censorship. It is possible that this eruption was intended as a further warning to WHO regarding the implementation of WHA59.26. Later in 2006 WHO announced a new publications policy requiring DG approval of anything which might be seen as political.
The long delayed production of a promised ‘tool’ for assessing the health implications of trade issues is intriguing. The Tool was first mooted as early as 2006 and work is reported to have commenced in 2007. Hawkes et al (2010) note that a report ('Toward building a national strategy on trade and health: a diagnostic tool for policy makers') was submitted to WHO in 2009. It has still not been released. The idea of health impact assessment of trade policy is a cautious, technicist approach to the implementation of WHA59.26. It is not clear why the process was allowed to grind to a halt; perhaps lack of money, perhaps lack of enthusiasm. It appears that a number of other intergovernmental bodies were also involved in the development of the tool; it maybe that negotiations over content were deadlocked.
A long time academic observer has commented that WHO had been very late in responding to the WTO agreements and has still not got to grips with the various bilateral and regional agreements.
In many ways, WHO missed the boat with the TRIPS Agreement. It is now missing the boat with bilateral and regional trade agreements forging ahead. WHO is like a guest arriving chronically late at major parties - and then complaining that all the food is gone!
Overview
- 1(1)…reaffirm that public health considerations are paramount in pharmaceutical policies;
- 1(2)…adapt national legislation to enable the full use of TRIPS flexibilities;
- 1(3)…maintain efforts to operationalize paragraph 6 of the Doha Declaration (enabling compulsory licensing for export);
- 1(4)…encourage research on diseases that affect developing countries;
and requested the DG inter alia to:
- 2(1)…promote technology transfer;
- 2(2)…establish an expert inquiry into IPRs, Innovation and Public Health;
- 2(3)…monitor and analyse trade agreements.
Rec 1(1) remains controversial. While the rhetoric affirms the importance of public health, the practice of the RBPMs and their nation state sponsors continue to adopt policies which privilege profit over access.
The outcomes in relation to Rec 1(2) are not very positive. India is the exception having adopted a Patent Act which takes advantage of most of the flexibilities in TRIPS (K.M. 2010). Brazil is presently considering comparable reforms (Baker, Kapczynski et al. 2013). However, Oliveira, Bermudez, Chaves, and Velásquez (2004) find that most Latin American countries have not taken advantage of these flexibilities and in East Africa there is continuing pressure to adopt patent laws which are essentially TRIPS plus, including the criminalisation of IP infringement (Musungu, Villanueva et al. 2004, Musungu 2010). The use by the USA of coercion, associated with Super 301 provisions of the US Trade Act to prevent countries from utilizing TRIPS flexibilities has been well documented (Markandya 2001).
Rec 1(3) remains a work in progress. It is clear that the 2003 compromise is not working (Nicol and Owoeye 2013).
Rec 2(3) contributed to WHA59.26 which looks good on paper but has not been funded.
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