E-drug: Letter to USTR Zoellick re. WTO Patent discussions
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[Warning, this is quite a long message. TD]
Letter to USTR Zoellick regarding WTO Patent discussions
November 10, 2001
Robert B. Zoellick
United States Trade Representative
mailto:rzoellick@ustr.gov
Dear Ambassador Zoellick,
I am writing to urge the US government to withdraw its opposition to
language in the WTO Ministerial declaration that addresses
important public health problems, and support substantive efforts to
deal with trade relates aspects of public health. In her November 9,
2001 statement on the WTO negotiations, WHO Director General
Gro Harlem Brundland said "access to health care is a human right
and we all have an obligation to see this right progressively
realized," noting further that "many millions of people still cannot get
the medicines and vaccines they need at an affordable price."
These problems will certainly become more acute as the WTO rules
are more fully implemented.
Despite confusion created by public relations efforts by US and
European export industries, it is increasingly clear that the WTO
TRIPS accord presents barriers to medicines for many poor
countries. It is also clear that the public in the US and Europe do
not support government trade policies that make medicines
unaffordable in developing countries.
Unfortunately, in the current negotiations the US government has
Engaged in a number of strategic maneuvers designed to prevent
the developing countries from obtaining interpretations that would
address existing problems with the implementation of the TRIPS
agreement. The US has been in some cases proposing language
that would appear to benefit the poor, but which would actually
narrow protections for consumer interests, and in other cases,
asking African countries to take short term extensions of compliance
periods as a substitute for more permanent and sustainable
solutions. Given the power of the US government and the
situation in many developing countries, you may well succeed, but
only to our shame -- undoubtedly contributing to the growing list of
grievances against the US which harm other foreign policy
objectives and lower our standing in the world community.
It is objectionable that the US delegation is seeking to discredit
the positions advanced by the Brazil and Indian delegations on the
grounds that these countries are pursuing commercial rather than
public health objectives, positions that were advanced in today's
New York Times, for example. As you know, India is today the most
Important global source of low cost generics, and policies that
enable India to supply low cost generic drugs globally clearly benefit
the poor. We recognize that rules that allow India to be a major
global supplier of generic drugs, including those produced for sale in
countries that issue compulsory licenses, runs contrary to US export
company interests. But without the ability of poor countries to
obtain cheap alternative sources of drugs, the poor will suffer, and
the rules that will determine if this can be done are at the core of
this week's WTO discussions. Also, the US needs to acknowledge
the role that Brazil has played in leading the way in terms of its
commitment to funding HIV treatment, and which also created a
global market for generic HIV drugs, benefiting not only Brazil, but
also leading to huge reductions in the prices of HIV drugs in Africa
and other poor countries.
THE NEED FOR PRO-PUBLIC HEALTH INTERPETATION OF
THE TRIPS
In some cases the problems with the present TRIPS accord are
Manageable within the current framework of the agreement, if one
can obtain clarifications and pro-public health interpretations of
important sections of the agreement, and also if developing
countries manage to enact and implement laws that take advantage
of the much discussed "TRIPS flexibility," something which has yet
to happen. Here too it is noteworthy that the US government has
mounted a series of attacks on the WHO programs for technical
assistance on patent law changes, raising basic questions about the
good faith of US government officials who claim the existing
agreement has sufficient flexibility. It is hardly creditable to bash the
WHO for its efforts to help the poor countries write fast track
compulsory licensing laws, and pressure countries in
bilateral discussions, and then tell reporters at the WTO meeting
that we support the right of poor countries to write such laws.
FAILURE TO ADDRESS PROBLEMS WITH 31.F of TRIPS
Not only is the US government objecting to the most effective and
Plain language that makes it clear that members can protect the
public health, but it is refusing to address directly the most obvious
flaw in the agreement -- the harmful consequences of Article 31.f of
the TRIPS accord, which if strictly interpreted, would make
compulsory licensing an empty benefit for most developing
countries, although not for the US and many European countries,
which have both the industrial capacity and the domestic market to
make compulsory licensing feasible. This is a result that is morally
repugnant, and needs to be fixed.
The problems of Article 31.f have been discussed for some time,
Having been raised in numerous US and EU discussions with the
Trans-Atlantic Consumer Dialogue, and having been raised by
coalitions of public health groups even before the 1999 Seattle
Ministerial meeting, and in countless meetings with US and
European trade negotiators. Nonetheless we always find the US
government prepared to block concrete progress on this issue, in
this case putting the matter off yet again for future discussion, while
pressing ahead for immediate action on the trade priorities of other
US export industries. All the US government has to do to fix this
problem is support language that Article 30 of the TRIPS could be
used to permit exports of medicines where the legitimate interests of
the patent owner are protected in the export market, the approach
taken by HR 3235, a bill pending in the US Congress, or by
interpreting the existing TRIPS agreement so that an importing
country can grant a compulsory license to a firm in a foreign market.
Here it is worth noting that the HR 3235 presents very clearly the
ethical and practical issues that the WTO has to deal with, in a
Northern context. HR 3235 gives the Secretary of Health and
Human Services (HHS) the authority to permit the non-voluntary
use of a patent to export medicines in a public health emergency,
for example, if a highly contagious disease puts the lives of
Americans at risk, and there is inadequate access to medicine in
another country due to patent barriers, or in cases where for
humanitarian reasons the US wanted to rush medicines to aid in a
foreign public health emergency, including an act of terrorism or
biological warfare. It is unthinkable that we would fail to act in cases
where our actions could help, and for this reason alone your office
should address the problems of Article 31.f.
Section (c) of HR 3235
''(c) EXPORT OF HEALTH CARE PRODUCTS IN PUBLIC HEALTH
EMERGENCIES.-The Secretary may authorize the use of a
patent, without authorization of the patent holder or
any licensees of the patent holder, to export medicines
or other health care products that are needed to address
global public health emergencies, when the legitimate
rights of the patent holder are protected in the export
market.
What is deeply disturbing is that your office has mindlessly opposed
fixes to Article 31.f in order to help our export industries by
crippling the usefulness of compulsory licenses in many developing
country markets, in the post 2006 world where major generic
producers such as India will be required to issue 20 year patents on
medicines.
It is useful to note that the US and many other northern countries
Have used antitrust proceedings to address these issues, which is
Another case of the agreement having one impact in the US and
Europe, and another in a developing country that does not have the
Bureaucratic resources to benefit from some areas of TRIPS
"flexibility." Antitrust enforcement is an expensive and complex
undertaking, and remains largely a developed country tool for
issuing compulsory licenses. It is also important to note that the US
government itself issues compulsory licensees to foreign patents.
See for example the September 26, 2001 Federal Register notice
regarding United States v. 3D Systems Corporation and DTM
Corporation, where the US Department of Justice required zero
royalty compulsory licenses of Mexican and Canadian software
patents.
SHORT TERM EXTENSIONS OF COMPLIANCE PERIODS
The most cynical approach by the USTR has been to offer short-
Term extensions of TRIPS compliance to African countries, hoping
they will make a separate deal with the US, splitting the developing
country delegations.
The problems with the US proposals are many. The least
Developed countries already have the right to ask for extensions of
TRIPS compliance, and the US proposal probably has the effect of
limiting the term of such extensions, since they can be open ended
now under Article 66 of the TRIPS. Of course many African
countries do not even qualify as LDCs, including countries like
Kenya, Botswana, Ivory Coast, Ghana, Nigeria or Zimbabwe, which
are hardly rich countries by US or European standards.
But also, developing countries face very difficult non-WTO
pressures, including for example annual AGOA certification on IPR
issues, threats to withhold GSP benefits, and numerous bilateral
and regional trade negotiations where the US aggressively
advances TRIPS plus positions. Unless the US government has
some binding way to ensure that it will not separately pursue high
IPR standards in these other proceedings, LDCs and African
countries will not benefit from even these putative extensions. It is
of course relevant that H.R. 3005, a bill to give the USTR fast track
negotiating authority, requires the USTR to seek accelerated
compliance with TRIPS, as well as to oppose price controls on
medicines. Also, note that right now some 37 countries in Africa
already issue patents on antiretroviral drugs, five years before
required to do so by the TRIPS, so the notion that the formal
extension will be meaningful needs to be balanced with the reality
that US bilateral trade pressures make this a difficult if not
impossible situation for LDCs and African countries. For these and
other reasons, we support measures that actually modify the
understanding of what constitutes compliance under the TRIPS -- a
more realistic benefit to developing countries than a phoney
extensions that will be taken away in bilateral negotiations.
More important, however, the interests of LCDs and indeed every
County in Africa will be linked to the rules faced by India, Brazil and
Other developing countries that are excluded from the benefits of
the US proposal, for two reasons. First, LDCs and African countries
need to import medicines or at least active ingredients from
countries that have the best capacity to manufacture them -- such
as China, Korea, India, Brazil, etc. Second, the LCD and African
markets are so small that they lack the necessary economies of
scale to make generic manufacturing efficient for many drugs. As
has been pointed out on several occasions, it was the decision by
Brazil to purchase generic HIV drugs which created a sufficient
market to make today's low cost generics ARV drugs possible,
ultimately benefiting African countries and making HIV treatment a
feasible goal after years of high prices by US and European drug
companies. This is the empirical reality that you must deal with, and
take responsibility for as millions perish and suffer form AIDS and
other illnesses.
It is also appalling that the US government has sought to limit the
benefits of the TRIPS flexibility to only the most serious health care
problems, such as AIDS. Countless persons in poor countries will
need access to medicines for asthma and other common illnesses,
and why on earth should our trade policy make this difficult? Do we
really hate the poor that much? It is this appropriate from a country
so rich, that has benefited so much from global trade?
For these reasons, we ask that the US government re-examine its
opposition to the developing country proposals, and embrace more
moral and realistic trade objectives.
FOCUS TRADE TALKS ON R&D
Finally, to the extent that the US is truly concerned about R&D,
Rather than export company profits, we urge the US delegation to
propose a new round of trade on R&D, addressing such issues as
the lack of investment in R&D on drugs for neglected diseases, or
the need to have broader sharing of the burdens of funding basic
research, now largely paid for by US taxpayers through the NIH.
This would recast the trade debate in a positive way, emphasizing
also the important contributions by US taxpayers to fund global
R&D, and gain the support and respect of the public health
community. Indeed, it should be obvious that the entire framework
of the WTO trade agreements has been focused too much on the
narrow interests of our export industries, while failing to even
imagine the types of trade agreements what would have been
designed if the object was to advance public health goals. As our
trade policy emerges from the legacy of close ties and revolving
doors between lobby groups such as PhRMA and the USTR, it will
be necessary to turn trade policy into something that reflects real
public interest objectives. You need to lead the way, rather than
continue to act as a government funded and empowered surrogate
lobbyist for a handful of large export companies.
Sincerely,
James Love
Director
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
http://www.cptech.org, mailto:love@cptech.org
voice: 1.202.387.8030 fax 1.202.234.5176 mobile 1.202.361.3040
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