E-drug: Wed on para 6 negotiations: why things broke down
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This is a quick note on where the paragraph 6 negotiations seem to have
broken down. There was a period after Doha, where the USTR [US Trade
Representative] and DG-Trade [EU Trade policy director] genuinely
appeared to be making an effort to control their own export
industries, and reach a feasible compromise. There were significant
differences between positions advocated by the USTR, DG-Trade and
developing countries, and public health groups were quite critical of
the many of the early proposals, but a deal seemed to be possible.
DG-Trade seemed intent on limiting the "solution" to cases where its
various (let DG-Trade regulate prices in developing countries) tiered
pricing systems broke down, and DG-Trade always wanted a set of
special controls (safeguards) on developing countries (things they
asked for but did not get in the Canada Article 30 bolar case).
DG-Trade also made an early decision to exclude OECD countries from
the solution, both as importers and exporters, believing it would
eventually adopt a community patent, allowing it to "solve" the 31.f
problem within Europe itself. DG-Trade refused to engage its own
consumer interests in negotiations, framing everything as a
development issue, but it was mostly protecting what it perceived as
its core protectionist interest of its export pharma industry, while
moving ahead on paragraph 6.
The USTR was less interested in the various TRIPS plus "safeguards" the
DG-Trade was pushing, and mostly wanted to limit the "solution" to as few a
countries and as few diseases as possible, but on the issue of the diseases,
the US seemed to have some flexibility, having a very difficult time
explaining to anyone why cancer, asthma and some devices would be
excluded. The US also showed some early flexibility on reframing the
issue in terms of economies of scale, something DG-Trade refused to
do. The US strategy in negotiations was early on to split the Africa
group from the Latin and Asian delegates, and to focus on the
capitals, where trade ministers were less informed and easier to
pressure, and where the US could link a narrow paragraph 6 solution
to textiles, agriculture and other issues.
Right after Doha, the US government created an interagency task force to
deal with paragraph 6, with DHHS [US Dept Health and Human Services],
State, Department of Commerce, USPTO, USTR and others. State send a
major cable out to African embassies in March (we believe). The US
government negotiators and pharma held regular meetings.
By the summer[July 2002], big pharma began to exercise far more power
in the US and EC decision making, and DG-Trade and USTR positions
began to harden on a number of issues.
DG-Trade began to push for a role for the WTO in supervising individual
licenses that was quite extraordinary, and they decided the would try to
block an Article 30 approach, in favor of mechanisms that were as
complicated and burdensome as possible, giving the industry a set of
inventory and marketing surveillance tools that it would use to undermine
the generic industry. DG-Trade as also maddeningly legalistic on a number of
stupid issues, such as the need to limit the solution to only the precise
issues raised in the decidedly poorly written Paragraph 6 of the Doha
Declaration, for example focusing endlessly on the issue of how to measure
manufacturing capacity, as if this was the main public health problem
presented by 31.f, and as if DG-Trade never read the Canadian/EC bolar
dispute where economies of scale and exports were a major issue (and
DG-Trade lost) . The DG-Trade position was complicated by significant
dissent (pro-public health positions) in several European countries
(Netherlands, Belgium, France) and the European Parliament (Amendment 196).
The USTR by the summer had lost control over policy making to the White
House, and Zoellick pushed the USTR to harder and harder lines on a variety
of issues, but particularly on the scope of diseases. In the US election,
big pharma poured in millions, and was decisive in holding the House and
shifting the Senate to the republicans. Right before the election,
President Bush was forced to hurt big pharma on US Hatch/Waxman
issues to get votes. After the election, big pharma demanded ever
greater control
over the paragraph 6 negotiations. CEOs of companies were making regular
calls, and PhRMA demanded the USTR deliver on the scope of diseases issues.
In Sydney, Zoellick told the Africa group that the USA opposed allowing
asthma, cancer and other diseases in the "solution" and the USTR told the US
press it didn't want X-Ray machines included. Rosa Whitaker sent her
famous "three diseases" letter to Africa governments, PhRMA
[Pharmaceutical Research and Manufacturers of America] circulated a
"three disease" letter in the US Congress, PhRMA planted a long
editorial in the WSJ on "three disease" theory of what the Doha
Declaration was about.
As the TRIPS Council meeting began this week, there was a big pharma
meeting in the White House on Monday, and PhRMA's Shanon Herzfeld was
checked into the Hotel President Wilson with the US delegates to
crack the whip. Japan kicked off the disease debate by insisting
the vaccines be removed from the solution, on the grounds that
vaccines were technically not pharmaceuticals, another legalistic
reading of paragraph 6 that was completely at odds with everything
public health workers would recommend, and presenting the African
group with a "solution" that didn't even include the technologies
that might make ARV's unnecessary. Meanwhile the US press was
hailing vaccines that appeared to be promising for breast, cervical
and other cancers, which were clearly excluded on two grounds, they
are for cancer, and are vaccines. Then the US proposed its famous
traveling disease criteria, to limit the solution to only infectious
epidemics, as if the US would only tolerate public health measures
that might have a consequence on the US.
This week US missions in Africa, Asian and Latin American capitals stepped
up their pressure to close the deal, one African delegate reporting having
had a 30 minute call yesterday from his Trade Minister, demanding his
Geneva negotiator to just give the American's what they wanted.
But Pharma over played its hand. If there was a moment, it was when
it was reported that Japan wanted vaccines out. After that, there
was a sense that things were completely out of hand, and the US,
DG-Trade, Canada, and Switzerland appeared to be getting nowhere to
closing out the deal.
There was open criticism of the way that Edouardo Perez Motta from Mexico
was managing the negotiations, including language in drafts of text that
were in some cases verbatim from the pharma/Congress letter, and were
highly responsive to US/Japan suggestions on scope of diseases, and
often not
responsive to delegations that were asking for more attention to Article 30
style approaches in terms of legal mechanisms.
Now the USTR is stuck spending Thanksgiving explaining to Shanon
Herzfeld of PhRMA how threats of nuclear attacks may be necessary to
move the Africa group to cut a deal by Friday at 2 pm, when the TRIPS
council has a special unscheduled meeting for one more attempt to end
this negotiation.
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James Love, Consumer Project on Technology
http://www.cptech.org, mailto:love@cptech.org
voice: 1.202.387.8030; mobile 1.202.361.3040
James Love <james.love@cptech.org>
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