WTO and TRIPS: How Nepal can benefit

Shiv Raj Bhatt

Nepal’s membership of the World Trade Organization (WTO) brings hopes as well as fears. Some international health policy commentators are now arguing that the WTO is one of the most influential international agencies with respect to health. However, its likely impact is yet to be given attention in Nepal. WTO, as an instrument of trade liberalisation, can affect public health in multiple ways- both positively and negatively. Sometimes trade liberalisation affects directly, sometimes indirectly. Importantly, there is a positive link between freer trade and economic growth, which can lead to reduced poverty and higher standards of living, including better health. However, the health implications of WTO can be case specific, which basically depends on the existing level of development, availability and access to health facilities, country’s pharmaceutical production capacity, availability of human resources and research and development (R&D) capacity, etc.

Various WTO agreements, particularly the Trade Related Aspects of Intellectual Property Rights (TRIPS) may have significant implications for public health. The supporters of the TRIPS agreement argue that the protection of pharmaceuticals by patents should lead to an increase in the flow of technology transfer and foreign direct investment in developing countries like Nepal. It also helps to end “brain drain.” Moreover, availability of a wider range of better quality products, including medicines, will improve the welfare of general population.

On the other hand, many others are less optimistic. They argue that the prices of patented drugs and the amount of patent royalties will increase as the patent holders’ monopoly will become stronger and longer and multinational firms will be free to export finished or semi-finished products rather than transferring technology or foreign investment directly to developing countries.

The agreement contains several provisions that enable governments to implement their intellectual property regime in a manner which takes account of immediate and longer-term public health considerations. It also provides for some flexibility in the implementation of the agreement by allowing countries, under certain conditions, to limit patent owners’ exclusive right. Article 7 (objectives of the agreement), Article 8 (that allows member countries to formulate and adopt measures necessary to protect public health and nutrition) and Doha declaration make for a more public health-friendly interpretation of TRIPS by explicitly recognising that intellectual property rights are subservient to public health concerns. As a member, Nepal has an obligation to integrate into her patent legislation the minimum standards (patents for 20 years, no differential treatment between nationals and foreigners and reversal of the burden of proof) established by the TRIPS agreement. By the year 2016 (or before) Nepal will have to grant legal protection by patents to pharmaceutical products. However, the implications of Nepal’s WTO membership in general and intellectual property protection in particular for public health are inconclusive.

To reap the benefits of WTO membership and patent protection, Nepal must improve in human resource and infrastructure. In addition, Nepal’s strategy for the production and distribution of drugs will be incorporated into its national pharmaceutical policy, a component of the national health policy. Similarly, greater interaction between trade and health policy makers and practitioners and greater mutual awareness of trade and health policies is needed.