A/HRC/23/42 medicines23 and is backed by strong political commitment. The Special Rapporteur notes with satisfaction that in this respect a regional plan of action was drawn up for local production of essential medicines aiming to promote access to medicines in the east African region by the East African Community.24 16. There are, however, several challenges that need to be addressed in order to ensure sustainability of local production of essential medicines. In the short term, the pressures of reaching economies of scale and countering price competition from importers can mean higher prices for locally produced medicines.25 This results in a greater burden on the public health budgets of developing countries. 17. Lack of data on the price difference between locally produced and imported medicines is also a drawback in promoting local production.26 To help determine the affordability of locally produced medicines in the long term, States should also collect disaggregated data on the prices of imported medicines in comparison to locally produced medicines. 18. In complying with their obligation to ensure availability of medicines, States may consider the following policy options to develop an enabling environment that promotes the growth of local pharmaceutical industry: (i) levying taxes on imports of medicines that can be locally produced, except for active pharmaceutical ingredients which are generally not imported; (ii) providing subsidies;27 (iii) tax incentives; (iv) guaranteed government procurement to local manufacturers; and (v) a regulatory framework to increase local competitiveness. As highlighted during the Special Rapporteur’s consultations, local production of medicines has indirect benefits, such as (i) promoting transfer of technology (ii) providing employment and capacity-building of local people through training programmes for local pharmacists (ii) microbiologists and technicians, and (iii) setting up local institutes of higher education and contributing to capacity-building of the regulatory agencies. Thus, opting for local generic production should be weighed and balanced against a number of benefits, including strategic security in medicines supply, which would be achieved in the long run as opposed to the higher prices in the short run. 19. States should also take advantage of flexibilities under the Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS Agreement). The 2001 Doha Declaration on TRIPS and Public Health reaffirms these flexibilities in support of World Trade Organization (WTO) members’ right to protect public health and to promote access to medicines for all. Furthermore, paragraph 6(i) of the Decision of the General Council of 30 August 2003, under the Doha Declaration on TRIPS and Public Health, specifically allows least-developed countries (LDCs), more than half of whom are party to a regional trade agreement, to produce medicines locally in the public health interest, irrespective of patents on medicines, with the intention of making medicines more affordable by increasing economies of scale through regional sales. 23 24 25 26 27 United Nations, Local Production of Pharmaceuticals and Related Technology Transfer in Developing Countries: A series of case studies by the UNCTAD Secretariat (2011), p. 14. East African Community Regional Pharmaceutical Manufacturing Plan of Action (2012-2016). WHO, Increasing Access to Vaccines Through Technology Transfer and Local Production (2011), p. 24. WHO, Local Production for Access to Medical Products: Developing a framework to improve Public Health (2011), p. 47. Lorraine Hawkins, “Competition Policy”, Working Paper 4, Review Series on Pharmaceutical Pricing Policies and Interventions, WHO/Health Action International (HAI) Project on Medicines Prices and Availability (2011), p. 26. 7