EU Trade Commissioner Phil Hogan issues statement on European Union compulsory licensing in context of COVID-19, makes important statement about TRIPS Article 31bis

On 14 May 2020, Bernd Lange, Chair of the European Parliament’s Committee on International Trade (INTA) wrote a letter to Phil Hogan (Commissioner for Trade, European Commission) on the “commercial aspects of intellectual property rights for medical products in the context of COVID-19.” Lange’s letter to Commissioner Hogan raised several questions concerning trade rules, compulsory licensing, data exclusivity, and trade secrets in the COVID-19 response.

MEP Lange addressed the following questions to Commissioner Hogan in relation to the European Union’s decision to opt-out of a mechanism in the World Trade Organization (WTO) rules on patents designed to enable WTO members to import drugs, vaccines or diagnostic tests manufactured under a compulsory license in another country. For more context, please see:

Lange asked:

“The same questions also affect the EU’s and Member States’ ability to import a future cure, a vaccine or other needed medicines produced abroad, should efforts for finding a voluntary licensing agreement fail. While stepping up production capacities in Europe is key, all options to ensuring the adequate availability of needed pharmaceuticals should be on the table. The EU and many Member Staves have partially limited their ability to make use of compulsory licensing by opting-out of the system established under the 30 August 2003 Decision of the WTO. Could you elaborate on the current tools available to the EU in this context?”

On 26 May 2020, Commissioner Hogan provided the following response.

With regard to the question concerning the EU’s and Member States’ ability to import a future cure, vaccine or other needed medicines produced abroad, I would like to note that the EU remains one of the leading regions in the world with a large-scale pharmaceutical manufacturing capacity, in particular for vaccine production. At the moment, due to the fact that the EU has a substantial innovative pharmaceutical industry, a large number of countries look up to the EU as a potential source of supply for a possible cure or future vaccine. However, the Commission is also very well aware of the discussion on upscaling production and the complex global supply structure of medicinal products. The Commission is monitoring the situation carefully, in close contact with Member States, and it will not hesitate to take the necessary action if if the need arises, also as regards the EU’s non-importer status under Article 31 bis of the TRIPS Agreement.

Commissioner Hogan’s response to the European Parliament leaves the door open to revisiting the EU’s decision to opt-out of Article 31bis of the WTO TRIPS Agreement as an importer. This is significant because there has been a debate on whether or not WTO members that initially opted-out as importing members can ever change their minds. At least in this communication, Hogan has indicated that changing the status is on the table, and this will have political consequence in any subsequent WTO decision.