E-drug: CPT on Africa Trade bill negotiations
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James Love
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
http://www.cptech.org
202.387.8030; fax 202.234.5176
April 11, 2000
Senator William Roth
Senator Diane Feinstein
Senator Russell Feingold
Representative Dennis Hastert
Representative Charles Rangel
Dear Members of Congress:
I am writing to express our opposition to the current proposals
for a compromise on the Feinstein/Feingold amendment to the
Africa trade bill, concerning access to medicines for the
treatment of HIV/AIDS. It is our opinion that the proposed
language should be rejected, on the grounds that it fails to
achieve the objective of the original amendment -- namely to
restrain US government bullying of African countries over the
pricing of pharmaceutical drugs.
In its original form, the amendment would cut off funds to
federal agencies that sought
"through negotiation or otherwise, the revocation or
revision of any intellectual property or competition
law or policy that regulates HIV/AIDS pharmaceuticals
or medical technologies of a beneficiary sub-Saharan
African country"
if the policy promoted access to medicines for HIV/AIDS, and was
consistent with the World Trade Organization (WTO) TRIPS
agreement on the protection of intellectual property. The
amendment sought to eliminate so called "TRIPS Plus" pressures
from the US government -- that is, the current US policy of
pressuring countries to adopt stronger forms of intellectual
property protection than are required by the WTO.
This amendment is needed to address an appalling aspect of US
foreign policy. In the face of a horrific public health crisis,
US trade officials are forcing African and other developing
countries to enact pharmaceutical policies that raise the price
of medicines, far beyond what is required by even the World Trade
Organization in its TRIPS accord on intellectual property rights.
Under the proposed "compromise" legislation, the "no TRIPS plus"
provision has been replaced with a complex presidential review of
African country policies. This review seeks to determine if the
US government should pressure countries to adopt intellectual
property protections that exceed the WTO requirements.
The April 6 compromise proposal sets standards for a country to
obtain relief from bullying. African countries are unlikely to
meet those standards. Indeed, the April 6 compromise proposal
uses precisely the language that has been used against poor
countries for many years, as a public relations cover story for a
decidedly commercial agenda on behalf of US firms. Rather than
change US policy, the April 6 language would embrace and codify
the very justification for trade pressures that have been used in
dozens of country disputes.
The April 6 language would evaluate African policies to broaden
access to medicines and determine if the practices would be
tolerated, or become the basis for a variety of trade pressures,
including linkage to benefits of the Africa trade legislation.
The six part review is as follows:
(1) the measure is not inconsistent with the Agreement on
Trade-Related Aspects of Intellectual Property Rights
referred to in section 101(d)(15) of the Uruguay Round
Agreements Act;
Discussion: In the original provision, this would be the only
test. Is the policy permitted under the WTO rules
for intellectual property? Now this is just the
beginning.
(2) the country is making significant progress toward developing
the infrastructure necessary to ensure that the
pharmaceuticals or medical technologies are properly
distributed to the affected population in the country;
Discussion: Virtually all African countries have woefully
inadequate medical infrastructures. It is trivial
to flunk a country on this item. (Indeed, US
government could flunk on this item, given the
widespread misuse of prescription drugs in this
country.) Right now, the US government is using
the infrastructure issue to justify its trade
pressures against African countries that want to
grant compulsory licensing of pharmaceutical
patents to make drugs available at lower prices.
Indeed, the high price of drugs is said by some US
government officials to be a good thing for
Africa, because "they" cannot use the drugs
properly. Of course, there will surely be misuse
of drugs in Africa (as there is now in many US
households). No one wants the misuse of drugs in
Africa, and the issue of drug resistant strains of
HIV/AIDS is not a trivial public health concern.
However, the solution is to encourage investments
in the medical infrastructure, not to raise the
prices of medicines. Indeed, the high cost of
medicine is a huge problem for African public
health workers. Pharmaceutical drugs already
represent 40 to 60 percent of the cost of public
health services in some African countries.
(3) the country has engaged in meaningful efforts to improve
public understanding of HIV/AIDS and to encourage practices
that will prevent further transmission and infection;
Discussion: Many African countries have HIV/AIDS infection
rates as high as 10 to 25 percent of persons 15 to
40 years old, and it will not be difficult to
flunk countries for not having meaningful
prevention efforts. Indeed, some US communities
would fail this test too. For example, what about
US schools that do not provide real sex education,
or communities that will not distribute condoms or
clean needles to target populations, in the USA?
(4) the country has taken all reasonable steps to ensure the
safety and efficacy of the pharmaceuticals or medical
technologies;
Discussion: "All reasonable steps" is a very high standard.
It is used in the United States to prevent imports
of Claritin or Tamoxifen from Canada at a fraction
of the US price, a policy now challenged in a half
dozen bills before the US Congress. This is
precisely the argument used by the
USTR/State/DOC/White House, etc. to oppose
Parallel Imports in South Africa, as outlined in
some detail in the highly relevant February 5,
1999 US Department of State Report, "U. S.
Government Efforts to Negotiate the Repeal,
Termination or Withdrawal of Article 15(c) of the
South African Medicines and Related Substances Act
of 1965."
http://www.cptech.org/ip/health/sa/stdept-feb51999
.html
No African country is now taking "all reasonable
steps" to ensure "safety and efficacy" of
pharmaceuticals. The US fast track approval
procedures for new drug approvals don't either.
Does any country meet this standard? Also, in
Thailand, the US requires the government to
engaged in years of unnecessary efficacy and
safety testing for (off patent) drugs, to keep
cheaper generic drugs off the market.
http://www.cptech.org/ip/health/c/thailand/
(5) the country has otherwise made reasonable efforts to work
with the patent holder to address the problems of supply of
the product;
Discussion: This is one of the main attacks by US trade
officials regarding both compulsory licensing and
parallel importing. See the
http://www.cptech.org/ip/health web page, and
specifically the pages on South Africa and
Thailand for current examples. In South Africa,
the US wanted to create a complex system whereby
South Africa had to prove that it would negotiate
with patent owners and prove the country benefited
from buying drugs outside its national borders
(parallel imports), before shopping outside South
Africa for cheaper drugs (how would they even know
what the best price was?). In Thailand, the US
put pressure on the government for years to delay
the issuance of a compulsory license for a
formulation patent for ddI, a US government
invention for HIV/AIDS. In the Dominican
Republic, the US claims that a 180 day period of
negotiation for a voluntary license isn't long
enough. The US government uses arguments like
this to undermine needed "fast track" compulsory
licensing efforts in poor countries (many poor
countries do not have the capacity to undertake
extensive litigation, or even evaluate patent
claims, and issue in South Africa and Thai cases).
It is also relevant to point out that the US
government itself does not even negotiate with
patent owners for public use. It just takes
patents under 28 USC section 1498, and pays
compensation for a taking, a practice not even
emulated by countries that are subject to US trade
pressures. See also the December 28, 1993 US
Presidential Executive Order 12889 that relates to
NAFTA, where President Clinton said:
"Sec. 6. Government Use of
Patented Technology. (a) Each
agency shall, within 30 days
from the date this order is
issued, modify or adopt
procedures to ensure
compliance with Article
1709(10) of the NAFTA
regarding notice when patented
technology is used by or for
the Federal Government without
a license from the owner,
except that the requirement of
Article 1709(10)(b) regarding
reasonable efforts to obtain
advance authorization from the
patent owner:
"(1) is hereby waived for an
invention used or manufactured
by or for the Federal
Government, except that the
patent owner must be notified
whenever the agency or its
contractor, without making a
patent search, knows or has
demonstrable reasonable
grounds to know that an
invention described in and
covered by a valid United
States patent is or will be
used or manufactured without a
license; and
"(2) is waived whenever a
national emergency or other
circumstances of extreme
urgency exists, except that
the patent owner must be
notified as soon as it is
reasonably practicable to do
so."
(6) the country is not otherwise engaged in a persistent pattern
of conduct that denies adequate and effective protection of
intellectual property rights.
Discussion: This is the standard open ended "TRIPS Plus"
language from US trade law, and it completes the
process of turning a "no TRIPS plus" provision
into a "TRIPS plus" provision for the Africa Trade
bill. An example of how this worked is the 1999
301 citation for South Africa for permitting its
public health doctors from addressing the World
Health Organization on the need for access to
medicine -- an act deemed hostile to intellectual
property rights and a barrier to US trade. Also,
the 1998 and 1999 complaints by the US that South
Africa permitted generic registration of
Paclitaxel (generic Taxol), because some countries
(in the EU) still provided exclusive rights to
data from the NIH sponsored clinical trials on
Taxol (even though those rights expired in the US
in 1997). Here is the 1999 USTR 301 Report on
South Africa:
"South Africa: South Africa's
Medicines Act appears to grant the
Health Minister ill defined
authority to issue compulsory
licenses, authorize parallel
imports, and potentially otherwise
abrogate patent rights.
Implementation of the law has been
suspended pending the resolution of
a constitutional challenge in the
South African courts. Undisclosed
test data is also not adequately
protected under South African law.
During the past year, South African
representatives have led a faction
of nations in the World Health
Organization (WHO) in calling for a
reduction in the level of
protection provided for
pharmaceuticals in TRIPS.
Copyright piracy and trademark
counterfeiting is widespread and
the U.S. copyright industry
estimates that trade losses due to
piracy of copyrighted works
increased more than 35 percent
between 1997 and 1998. However, the
South African Government recently
took the welcome step of adopting a
implementing strategy to its 1997
Counterfeit Goods Act which could
strengthen enforcement. We call on
the Government of South Africa to
bring its IPR regime into full
compliance with TRIPS before the
January 1, 2000 deadline, ensure
that all Government offices use
only legitimate software, and
clarify that the powers granted in
the Medicines Act are consistent
with its international obligations
and will not be used to weaken or
abrogate pharmaceutical patent
protection."
Note that the language in 6 above permits the
government to tie copyright violations to the issue of
access to medicines for AIDS. Note also that the USTR
report repeatedly mischaracterised South Africa law.
For example, while the USTR referred to the fact that
South Africa's decision to permit parallel imports
would violate patent rights, it did not report that US
patent law already permits parallel imports. (US
barriers to parallel imports are based upon health and
safety grounds, not intellectual property grounds). As
noted above, USTR even considered South Africa Ministry
of Health participation in WHO meetings on access to
drugs as a barrier to US trade, and demanded an
effective end to public criticisms of US policy
positions on patent rights -- an appalling foreign
policy decision even without considering the truly
terrible public health tragedy in Africa.
For these reasons, we urge you to reject the proposed compromise
language on the Africa trade bill. It will give the misleading
impression that Congress has fixed a problem while conferring all
of the substance and power to the current morally flawed policy.
Sincerely,
James Love
<------Feinstein/Feingold amendment as passed the Senate---->
(c) LIMITATION ON USE OF FUNDS- Funds appropriated or
otherwise made available to any department or agency of the
United States may not be obligated or expended to seek, through
negotiation or otherwise, the revocation or revision of any
intellectual property or competition law or policy that regulates
HIV/AIDS pharmaceuticals or medical technologies of a beneficiary
sub-Saharan African country if the law or policy promotes access
to HIV/AIDS pharmaceuticals or medical technologies and the law
or policy of the country provides adequate and effective
intellectual property protection consistent with the Agreement on
Trade-Related Aspects of Intellectual Property Rights referred to
in section 101(d)(15) of the Uruguay Round Agreements Act.
<----(as of April 6) Proposed compromise language--------->
(C) POLICY OF UNITED STATES GOVERNMENT TOWARDS BENEFICIARY
COUNTRIES - The President shall encourage all beneficiary
sub-Saharan African countries to implement policies designed to
address the underlying causes of the HIV/AIDS crisis, including
through efforts to encourage practices that will prevent further
transmission and infections and to stimulate development of the
infrastructure necessary to deliver adequate health care
services. In addition, the President shall encourage policies
that provide an incentive for public and private research on and
development of vaccines and other medical innovations that would
contribute to combating the HIV/AIDS crisis facing Africa.
Where a measure relating to the distribution of HIV/AIDS
pharmaceuticals or medical technologies in a beneficiary country
has been identified under section 182 of the Trade Act of 1974,
the President shall determine whether -
(1) the measure is not inconsistent with the Agreement on
Trade-Related Aspects of Intellectual Property Rights
referred to in section 101(d)(15) of the Uruguay Round Agreements
Act;
(2) the country is making significant progress toward
developing the infrastructure necessary to ensure that the
pharmaceuticals or medical technologies are properly distributed
to the affected population in the country;
(3) the country has engaged in meaningful efforts to improve
public understanding of HIV/AIDS and to encourage practices that
will prevent further transmission and infection;
(4) the country has taken all reasonable steps to ensure the
safety and efficacy of the pharmaceuticals or medical
technologies;
(5) the country has otherwise made reasonable efforts to
work with the patent holder to address the problems of supply of
the product;
(6) the country is not otherwise engaged in a persistent
pattern of conduct that denies adequate and effective protection
of intellectual property rights.
Where the President determines that the beneficiary country
and the measure it intends to adopt satisfies the requirements
set out in this subsection, he shall instruct the United States
Trade Representative not to seek, through negotiation or
otherwise, the revocation or revision of such measure within the
beneficiary country.