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 announced a framework to ease WTO rules to allow countries in need to import life-saving drugs.

On August 30, 2003, the WTO General Council adopted the TRIPS/health "solution," which is comprised of a Decision and an accompanying Chairman's Statement that sets out the shared understandings of WTO Members on how the Decision should be interpreted and applied. Under the solution, Members are permitted, in accordance with specified procedures, to issue compulsory licenses to export pharmaceutical products to countries that cannot produce drugs for themselves.

The United States strongly supports effective and appropriate use of the TRIPS/health solution to facilitate access to life-saving medicines by countries in need. The United States would be willing to discuss the need to provide technical assistance if some Members encounter difficulties in implementing or utilizing the solution.

In fact, the United States has already taken steps to ensure that the solution can be implemented. For example, in July 2004, the United States reached an agreement with Canada to ensure that NAFTA's provisions will not impede implementation of the TRIPS/health solution.

The TRIPS Council is under instructions to incorporate the solution into an amendment of the TRIPS Agreement. The United States supports an amendment that reflects the agreement reached in August 2003, and will remain committed to working with the other Members to reach a consensus for an amendment as expeditiously as possible. In order to move towards an amendment, the United States submitted a paper at the March 2005 meeting of the WTO TRIPS Council expressing support for the amendment and setting out a simple and effective approach to do so. The solution will continue to be available as a WTO waiver until an amendment is finalized.

In the recent Free Trade Agreements with CAFTA-DR, Morocco, and Bahrain, the United States has clarified that the intellectual property provisions in the agreements do not stand in the way of measures necessary to protect public health. Specifically, the United States has confirmed that the intellectual property chapters of the FTAs do not affect the ability of the United States or our FTA partners to take necessary measures to protect public health by promoting access to medicines for all, in particular concerning cases such as HIV/AIDS, tuberculosis, malaria, and other epidemics as well as circumstances of extreme urgency or national emergency. The United States has also made clear that the intellectual property chapter of the FTAs will not prevent effective utilization of the TRIPS/health solution.

Sustainable Innovation

The ability of innovative industries to continue to develop new products depends largely upon two factors: (1) a strong and effective intellectual property system; and (2) the capacity to market new products effectively during the period of time when the exclusive intellectual property rights exist. Although intellectual property protection is a necessary condition for encouraging innovation in all sectors, it is the ability to market products effectively that provides the incentive for continued innovation and generates the returns on investment necessary to fund new research