E-DRUG: BMJ Editorial on Aust-US FTA & PBS
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[the BMJ has a relevant editorial - see below.
Copied as fair use. See also
http://bmj.bmjjournals.com/cgi/eletters/328/7451/1271
WB]
The free trade agreement between Australia and the United States
Drahos, P. Henry, D.
Editorial
BMJ 2004;328:1271-1272 (29 May)
http://bmj.bmjjournals.com/cgi/content/full/328/7451/1271?etoc
The free trade agreement between Australia and the United States
undermines Australian public health and protects US interests in
pharmaceuticals
On 4 March 2004 Australia and the United States released the text of a
bilateral trade agreement designed to reduce trade barriers between
the countries.1 Surprisingly, the Australian pharmaceutical benefits
scheme (the national drug subsidy programme operated by the federal
government of Australia) was part of the deal, with Australian
negotiators conceding to several US demands.
These included the creation of an independent review body to examine
drugs rejected by the Pharmaceutical Benefits Advisory Committee.
Under existing legislation only the advisory committee can recommend
listing of drugs for subsidy. However, the dissenting views of another
review body, supported by publicity and lobbying, may undermine the
famously tough stance of this committee concerning the cost
effectiveness and prices of pharmaceutical products. In addition,
Australia has agreed to changes in intellectual property protection
that, among other things, increase the risk of delayed entry of generic
drugs on to the Australian market.
The use of the trade agreement to push the interests of US
pharmaceutical companies is one in a long list of hostile moves that
have included legal challenges to the decisions of the Pharmaceutical
Benefits Advisory Committee to reject drugs for subsidy and political
lobbying for removal of committee members.2
This trade agreement, however, is of wider importance. It follows a
pattern of trade agreements by the United States (with Jordan, Chile,
and Singapore) that contain long chapters on intellectual property.
These represent a retreat from the principles espoused in the Doha
declaration of the World Trade Organisation (WTO), which stated that
the agreement on trade related aspects of intellectual property rights
(TRIPS) should be interpreted and implemented so as "to protect public
health and, in particular, to promote access to medicines for all."3
This was a major step forward for public health and access to
medicines.
The bilateral trade agreements now being negotiated by the United States
seem to be designed to undermine the Doha agreement and promote a
particular business model for the production of medicines that is based
on ever stronger patent protection.
TRIPS forms one of the pillars of the WTO. One of the most important
obligations in TRIPS is the recognition of patents in any field of
technology for both products and processes. This in effect globalises
the patenting of pharmaceutical technologies. As the HIV/AIDS epidemic
grew, and patented (but expensive) antiretroviral drugs became
available in rich countries, the full implications of TRIPS for access
to long term treatment by poor people became clear. The adoption of
the Doha declaration in 2001 to address this problem was crucial. The
declaration is really a bill for rights for the public health
regulation of medicines. Lying at its core is the recognition that WTO
members have the right to interpret and implement TRIPS in ways that
places public health before trade.
But large pharmaceutical companies in the United States and Europe have
seen risks to their profits in the Doha declaration. With the public
gaze fixed on TRIPS and the WTO they have encouraged the proliferation
of bilateral trade agreements that contain intellectual property
standards that are much stronger than those to be found in TRIPS.
The Australian-US agreement follows the template that US negotiators
use for intellectual property in all such trade negotiations.
Compulsory licensing of patents is prohibited except in three
circumstances (TRIPS permits compulsory licensing in any circumstances
if certain conditions are met). Provisions exist that require US
standards of exclusive protection for test data that are submitted as
part of the process for gaining marketing approval for pharmaceutical
products (TRIPS simply requires its members to protect against unfair
commercial use and does not specify a period of protection). Other
provisions require parties to offer patent term extensions for
pharmaceuticals (not required by TRIPS). On the important issue of
parallel trade the Australian-US agreement gives the patent owners
greater control over the importation or re-importation of their
products. TRIPS expressly steers away from setting a standard on
parallel trade.
Some of the greatest risks to Australia, however, may come from the
procedures to resolve disputes. The United States and Australia could
take different views of Australia's obligation to provide an
"independent review" of decisions made by the Pharmaceutical Benefits
Advisory Committee, because the meaning of this term has not been
specified. The fate of Australia's pharmaceutical benefits scheme
could come to lie in the hands of a three member trade panel set up
under the trade agreement. If Australia lost and did not comply with
the judgment of the panel the United States could retaliate by
suspending the benefits to Australia in other sectors affected by the
trade agreement, putting pressure on the Australian government to make
concessions on drug listing and pricing. Noteworthy here is the fact
that Australia has agreed to a procedure to resolve disputes that
allows for the possibility of non-governmental persons or entities to
make submissions. The US pharmaceutical industry, and its lawyers,
will no doubt see an opportunity here.
The United States offers no room for negotiation on intellectual
property in trade agreements. The law in the United States requires
that the country's trade negotiators bring back US standards of
intellectual property protection. A committee, which advises Congress
on intellectual property and trade, vets the intellectual property
chapter in each trade agreement. The committee's membership includes
Eli Lilly, Merck, Pfizer, the Pharmaceutical Research and
Manufacturers of America, and the Biotechnology Industry
Organization.4
Bilateral trade agreements and TRIPS together provide the US
pharmaceutical industry with a means of strengthening and enforcing
patent monopolies globally. They are a covert form of private
governance that threatens to undermine hard won public gains in health
regulation around the world. The United States is currently
negotiating, or is about to start negotiations, with 13 other
countries. Countries entering into such arrangements are engaged in a
high stakes gamble with their public health systems.
----------------
Peter Drahos, professor of law
Research School of Social Sciences, Australian National University,
ACT 0200, Australia
David Henry, professor of clinical pharmacology
School of Medical Practice and Population Health, University of
Newcastle, NSW 2308, Australia (mddah@mail.newcastle.edu.au)
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Competing interests: DH has a contract with Wyeth Consumer Products
(USA) to review adverse effects of non-steroidal anti-inflammatory
drugs and cyclo-oxygenase 2 inhibitors.
-----------------
References
1. Australian Department of Foreign Affairs and Trade. Australia-United
States Free Trade Agreement.
www.dfat.gov.au/trade/negotiations/us_fta/text/index.html (accessed 17
Mar 2004).
2. Henry DA, Birkett D. Changes to the pharmaceutical benefits scheme.
Med J Aust 2001;174: 209-10.[ISI][Medline]
3. World Trade Organization. Declaration on the TRIPS agreement and
public health. Fourth WTO Ministerial Conference, Doha, Qatar, 9-14
November 2001.
http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.h
tm (accessed 11 May 2004).
4. The US-Australia Free Trade Agreement (FTA). The intellectual
property provisions report of the Industry Functional Advisory Committee
on Intellectual Property. Rights for trade policy matters (IFAC-3).
www.ustr.gov/new/fta/Australia/advisor/ifac03.pdf (accessed 17 Mar
2004).
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