[e-drug] EU Urged To Back Poor Countries

e-drug
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E-DRUG: EU Urged To Back Poor Countries
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http://www.ip-watch.org/weblog/index.php?p=642&res=1024

6 June 2007
EU Urged To Back Poor Countries' Use Of TRIPS Flexibilities
By David Cronin for Intellectual Property Watch

BRUSSELS - The European Union should stop demanding that poor countries
apply its intellectual property rules to medicines through trade
negotiations with the African, Caribbean and Pacific (ACP) bloc, legal
experts argued at an 4 June event here.

The EU's executive arm, the European Commission, is hoping to conclude
free trade deals known as Economic Partnership Agreements with 76 ACP
countries by the end of this year. Under proposals put forward by the
Commission, these would require ACP countries to place EU intellectual
property rules on their national statute books.

Frederick Abbott, a professor of international law at Florida State
University (US), said that if the Commission is successful, it would
impose a 'substantial burden' on the countries concerned and that there
could be adverse consequences for public health. Instead, he recommended
that the EU encourage poor countries to make use of flexibilities in rules
on intellectual property rights at the World Trade Organization (WTO).
Doing so could drive down the cost of drugs that would prove prohibitive
should the patents on them be enforced.

Abbott has been hired by the European Parliament's committee on
international trade to prepare an analysis of what policy options the EU
has to boost the supply of medicines in poor countries.
Presenting his initial findings on 4 June, Abbott considered whether the
Parliament should endorse a December 2005 protocol amending the WTO's
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
(IPW, WTO/TRIPS, 6 December 2005).

The protocol is designed to give permanent effect to a 2003 waiver from
TRIPS agreed by to by WTO members. The waiver allows countries lacking
drug manufacturing capacity the increased possibility to import generic
versions of patented medicines produced under compulsory license. It
followed the declaration of the 2001 WTO ministerial conference in Doha,
Qatar, that intellectual property rights should be interpreted in a way
that protects public health and promotes 'access to medicines for all.'
Abbott said that if members of Parliament decide to push for a
renegotiation of the amendment, there is a risk that the pharmaceutical
industry will succeed in restricting the protocol's scope so that it could
only be used to cover certain diseases.

Yet while the WTO has asked its 150 member governments to ratify the
protocol by the end of 2007, Abbott argued that the Parliament may be
right to stall on approving it. Delay could be used as a tactic to
pressure the Commission and the 27 EU governments to refrain from
insisting that ACP countries agree to apply EU standards on intellectual
property.
Jerome Reichman, professor of law at Duke University (US), said that poor
countries in general have seen 'an enormous flood of patent applications”
in recent years. Colombia's patent office, for example, has some 3,500
applications pending. Reichman, who is co-author of the report with Abbott, said that the European Commission's proposals to the ACP countries would require them to enforce intellectual property in a way that presumed in favour of patent holders and compensate them for losses incurred when patents are infringed upon.

European Union Silence
A Commission official said, however, that the ACP should use European
rules on intellectual property as a 'source of inspiration,' in particular
to prevent fraud. 'We have to face the reality that poor people are often
confronted with fake medicines,' the official added. 'This is certainly
the case in Africa.'
The humanitarian organisation Medecins Sans Frontieres (MSF) has called on
the EU to support countries that have decided to issue compulsory licenses
to overrule drug patents.
Paul Cawthorne, MSF's head of mission in Thailand, said 'it is of
considerable concern that the European Union has been silent' in the
international dispute that followed the Thai government's decision to
issue a compulsory license for the AIDS treatment efavirenz in November
2006. At $468 per patient per year, the price charged by Merck, the drug's
patent-holder, was more than twice that of a generic version of the same
medicine, made in India. Yet while the Thai decision was taken on public
health grounds, it was opposed by drug firms and by the US government.
'In Thailand, I saw men, women and children dying because they could not
have access to medicines at prices MSF or the Thai government could
afford,' said Cawthorne, adding that the issuing of compulsory licenses
had led to an 'impressive scaling up of treatment'.
But Jon Pender, director of government affairs with GlaxoSmithKline,
claimed it is 'misleading and counter-productive to focus on intellectual
property protection as a significant barrier to access to medicines in
developing countries,' arguing that rampant poverty and inadequate
healthcare systems are bigger problems. More than 95 percent of all drugs
on the 'essential medicines list' compiled by the World Health
Organization (WHO) are not covered by patents, he noted. 'And yet the WHO
says that one-third of the world's population do not have regular access
to these drugs ,in parts of Africa and Asia, this rises to two-thirds.'
Italian Liberal MEP Gianluca Susta complained that 'not a single member of
the WTO has yet decided to use the system agreed in 2003 to import cheap
life-saving medicines.' This, he said, 'could mean that the decision does
not address in a satisfactory way the problems faced by developing
countries in accessing medicines at affordable prices.'
Greg Perry, director-general of the European Generic Medicines
Association, complained that the 2003 decision is 'only likely to have a
marginal impact.' Companies making generic versions of drugs would not
find it financially rewarding to supply drugs to small countries, even if
they issue compulsory licenses, he said, while recognising that it may be
possible to overcome that difficulty if several governments could issues
licenses jointly.

David Cronin may be reached at info@ip-watch.ch.

Alexandra Heumber
EU Advocacy Liaison Officer
MSF
Access to Essential Medicines Campaign
Rue Dupre, 94. 1090 Brussels
++32 (0) 2 474 75 09 (Dir off)
++ 32 (0) 479 514 900 (Mob)
++ 32 (0) 2 474 75 75 (Fax)
Alexandra.HEUMBER@brussels.msf.org

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Of equal and pressing importance is the following. I would appreciate
feedback.

THE G8: PROFITS BEFORE ERADICATING POVERTY

Despite Angela Merkel's pledge that global poverty is a priority for G8
policy, a little known commitment has been made to spend the $1.5 billion in donations to eradicate diseases of the poor so that three-quarters of it
will go to extra profits for a global pharmaceutical company and one quarter to meeting the costs of vaccines for pneumococcal diseases.

The contract being drawn up is called an Advanced Market Commitment, or AMC. Originally, it was designed to match the revenues and profits that big
companies make on drugs for affluent markets so that investing in research
to discover vaccines for neglected diseases would be as attractive as
developing another drug for wealthy nations. In reality, a company would be
unlikely to receive the matching jackpot. It would depend on the long shot
of developing a successful new vaccine, on whether a competitor also
developed one, and on recipient poor countries agreeing to participate.

In the case of pneumococcal vaccines, however, the AMC rationale is
irrelevant because the vaccines have already been discovered and their
clinical trials are already funded out of the large expected profits from
sales in affluent markets. Thus this G8 "AMC pilot" is neither an AMC nor a
pilot of one. Yet advisers to Merkel, Gordon Brown and G8 leaders have
persuaded them it is both.

By using an AMC contract, the G8 is projected to pay $5.00 a dose for
pneumoccocal vaccines that cost about $1.25 on a sustainable, nonprofit
basis that includes plant and other set-up investments. Paying $5.00 means
the donations will buy 300 million doses, while 1.2 million children in the
world's poorest nations could be immunized at the breakeven price. Vaccines
lift the human and economic burdens of disease in one shot; so G8 leaders
should maximize the number of children immunized.

There is a larger concern as well. The AMC design, developed at the World
Bank in 2000 and promoted by the Gates Foundation, commercializes the global campaign to reduce poverty by setting the precedent of pricing vaccines at several times their breakeven level. The G8 contract is also turning the organizations administering the program, like the GAVI Alliance, into agents for helping global pharmaceutical companies make large profits on medicines for poor nations. Already the rationale and rhetoric of the GAVI Alliance has shifted to justify paying four times the sustainable price for these vaccines that already are fully paid up in profitable sales. The same applies to the new vaccines for rotavirus. Will donors stand for most of their money going to profits rather than to helping the world's poorest children?

Pharmaceutical companies are committed to their social mission and programs
for the poor. They need to be approached on this basis to sell these
vaccines at a sustainable, break-even price. Even better would be to
negotiate licenses and permissions so that the donated money pays
third-world companies to make the vaccines for the poor. That way the
donated money would boost the economies of low-income countries. Their lower cost structure might get the price down to $1.00 a dose so that 300 million more children could be saved. This way, the donors would see their money providing a double benefit, and companies would gain much-needed respect for being good global citizens.

* * * * * * * * *
Donald W. Light is a Fellow at the Netherlands Institute for Advanced Study
and professor at the University of Medicine and Dentistry of New Jersey. He
is an expert in global pharmaceutical policy and helped develop AMCs.

Contacts: Light@nias.knaw.nl. Tel: 31-70-512-2742.