Sunday, April 30, 2006

At April 28 WHO EB meeting, Brazil proposes work on R&D Treaty

Here is a link to the text of the WHO EB's draft resolution on the resport of the WHO Commission on Intellectual Property, Innovation and Public Health (CIPIH).

from the mini EB meeting on April 28. The US government apparently walked out of the meeting, unhappy with the direction of things. There are a lot of brackets. With the US off the EB until June, Japan reported did most of the pro-Big-Phrma advocacy at this meeting. The meeting was strangly off limits to the public -- the gallaries were closed. Some of us were in the area, however. Bill Steiger was in Moscow at a G8 meeting with US DHHS Secretary Michael Leavitt, and did not attend the EB negotiation.

The developing countries were reportedly pretty strong in the meeting, and some OECD members were not bad... the Netherlands in particular was given high marks. But they ran out of time, and everything will be reargued at the WHA meeting in May.

Kenya, Brazil and other developing countries decided to discuss the CIPIH resolution as a separate matter from the early EB resolution on Global Framework for Essential Medical R&D, which will also be debated at the May WHA. There may or may not be an effort to merge the two. The CIPIH report covers a much wider range of issues, particularly in the areas of intellectual property rights and drug pricing.

(If you don't have time to read the whole 228 page CIPIH report, take a look at the report's greatest hits.

One issue that deserves much highlighting from the discussions of the 28th is this. Brazil proposed the following language for the CIPIH report:

(6) to initiate consultations on the possibility of elaborating a Framework Convention on Research Development and Innovation on Public Health in order to define priorities and financing alternatives on research, development and innovation in health.

This is the first time a country has formally proposed the WHO consider a treaty on medical R&D. In fact, now a number of countries are saying they will support starting work on an R&D framework convention. This is a stronger position than the one outlined in EB117.r13, which is more general.

Greatest Hits from CIPIH Recommendations

If you don't have time to read the 228 page report of the WHO's Commission on Intellectual Property, Innnovation and Public Health (oddly named CIPIH), which is on the web here:, you should look over these very useful recommendations. Jamie

page 70
2.10 Countries should provide in their legislation powers to use compulsory licensing, in accordance with the TRIPS agreement, where this power might be useful as one of the means available to promote, inter alia, research that is directly relevant to the specific health problems of developing countries.

page 74
2.12 Public research institutions and universities in developed countries should seriously consider initiatives designed to ensure that access to R&D outputs relevant to the health concerns of developing countries and to products derived therefrom, are facilitated through appropriate licensing policies and practices.

page 95
3.3 WHO should initiate a process to devise mechanisms that ensure the sustainability and effectiveness of public–private partnerships by attracting new donors, both from governments and the private sector, and also to promote wider participation of research institutions from developing countries. However, governments cannot passively rely on what these partnerships could eventually deliver; there is a need for a stronger commitment on their part for an articulated and sustainable effort to address the research gaps identified in this report.

page 106
3.5 Governments should continue to develop forms of advance purchase schemes which may contribute to moving later stage vaccines, medicines and diagnostics as quickly as possible through development to delivery.

page 107
3.6 Recognizing the need for an international mechanism to increase global coordination and funding of medical R&D, the sponsors of the medical R&D treaty proposal should undertake further work to develop these ideas so that governments and policy-makers may make an informed decision.

3.7 Practical initiatives that would motivate more scientists to contribute to this field through “open source” methods should be supported.

page 126
4.5 Policies for biomedical innovation must take account of the fact that health systems in many developing countries remain resource-constrained. Policies must emphasize affordable innovations adapted to the realities of healthcare delivery in developing countries, and covering appropriate technologies for the diagnosis, prevention and treatment of both communicable and noncommunicable diseases. Mechanisms for promoting such adaptive research in a systematic way must be improved.

page 133
4.6 All companies should adopt transparent and consistent pricing policies, and should work towards reducing prices on a more consistent basis for low and lower middle income developing countries. Products, whether originator's or generic, should be priced equitably, not just in sub-Saharan Africa and least developed countries, but also in low and lower middle income countries where there are a vast number of poor patients.

4.7 For noncommunicable diseases, governments and companies should consider how treatments, which are widely available in developed countries, can be made more accessible for patients in developing countries.

4.8 Continuing consideration needs to be given to the prices of treatments for communicable diseases, particularly of second-line drugs for HIV/AIDS treatment.

4.9 Governments of low and middle income countries where there are both rich and poor patients should formulate their funding and price regulation with a view to providing access to poor people.

4.10 Governments need to prioritize health care in their national agendas and, given the leverage to determine prices that patents confer, should adopt measures to promote competition and ensure that pricing of medicines is consistent with their public health policies. Access to drugs cannot depend on the decisions of private companies but is also a government responsibility.

4.11 Corporate donation programmes can be of great value in a number of fields in collaboration with the actions of governments and nongovernmental organizations. However, addressing health needs in developing countries requires more structured and sustainable actions by governments and other parties to stimulate accessibility to products, while generating new treatments and products adapted to the needs of developing countries.

4.12 Governments should remove any tariffs and taxes on health-care products, where appropriate, in the context of policies to enhance access to medicines. They should also monitor carefully the supply and distribution chain to minimize costs that could adversely influence the prices of medicines.

page 139

4.13 The Doha Declaration clarifies the right of governments to use compulsory licensing as a means of resolving tensions that may arise between public health and intellectual property, and to determine the grounds for using it. Developing countries should provide in their legislation for the use of compulsory licensing provisions, consistent with the TRIPS agreement, as one means to facilitate access to cheaper medicines through import or local production.

4.14 Developed countries, and other countries, with manufacturing and export capacity should take the necessary legislative steps to allow compulsory licensing for export consistent with the TRIPS agreement.

4.15 The WTO decision agreed on 30 August 2003, for countries with inadequate manufacturing capacity, has not yet been used by any importing country. Its effectiveness needs to be kept under review and appropriate changes considered to achieve a workable solution, if necessary.

page 140

4.16 Companies should adopt patent and enforcement policies that facilitate greater access to medicines needed in developing countries. In low income countries, they should avoid filing patents, or enforcing them in ways that might inhibit access. Companies are also encouraged to grant voluntary licences in developing countries, where this will facilitate greater access to medicines, in cases where patents do exist on medicines and other products, and to accompany this with technology transfer activities.

4.17 Developing country governments should make available full and reliable information on patents granted. WHO, in cooperation with WIPO and others, should continue to pursue the establishment of a database of information about patents, in order to remove potential barriers to availability and access resulting from uncertainty about the patent status in a country of a given product.

page 141

4.18 Developed countries and the WTO should take action to ensure compliance with the provisions of Article 66.2 of the TRIPS agreement, and to operationalize the transfer of technology for pharmaceutical production in accordance with paragraph 7 of the Doha Declaration on the TRIPS Agreement and Public Health.

page 142
4.19 The restriction of parallel imports by developed countries is likely to be beneficial for affordability in developing countries. Developing countries should retain the possibilities to benefit from differential pricing, and the ability to seek and parallel import lower priced medicines.

4.20 Developing countries need to decide in the light of their own circumstances, what provisions, consistent with the TRIPS agreement, would benefit public health, weighing the positive effects against the negative effects. A public health justification should be required for data protection rules going beyond what is required by the TRIPS agreement. There is unlikely to be such a justification in markets with a limited ability to pay and little innovative capacity. Thus, developing countries should not impose restrictions for the use of or reliance on such data in ways that would exclude fair competition or impede the use of flexibilities built into TRIPS.

page 145
4.21 In bilateral trade negotiations, it is important that governments ensure that ministries of health be properly represented in the negotiation, and that the provisions in the texts respect the principles of the Doha Declaration. Partners should consider carefully any trade-offs they may make in negotiation. Bilateral trade agreements should not seek to incorporate TRIPS-plus protection in ways that may reduce access to medicines in developing countries.

page 146
4.22 Governments and concerned international organizations should promote new purchasing mechanisms to stimulate the supply of affordable new products and to enhance the number of suppliers in order to provide a more competitive environment.

page 147
4.23 Developing countries should adopt or effectively implement competition policies and apply the pro-competitive measures allowed under the TRIPS agreement in order to prevent or remedy anti-competitive practices related to the use of medicinal patents.

page 148
4.24 Countries should provide in national legislation for measures to encourage generic entry on patent expiry, such as the "early working" exception, and more generally policies that support greater competition between generics, whether branded or not, as an effective way to enhance access by improving affordability. Restrictions should not be placed on the use of generic names.

4.25 Developing countries should adopt or effectively implement competition policies in order to prevent or remedy anti-competitive practices related to the use of medicinal patents, including the use of pro-competitive measures available under intellectual property law.

4.26 Bilateral trade agreements should not seek to incorporate TRIPS-plus protection in ways that may reduce access to medicines in developing countries.

page 152
4.27 Governments should take action to avoid barriers to legitimate competition by considering developing guidelines for patent examiners on how properly to implement patentability criteria and, if appropriate, consider changes to national patent legislation.

page 170
5.2 The formation of effective networks, nationally and internationally, between institutions in developing countries and developed countries, both formal and informal, is an important element in building innovative capacity. Developed and developing countries should seek to intensify collaborations which will help build capacity in developing countries.

5.3 WHO, WIPO and other concerned organizations should work together to strengthen education and training on the management of intellectual property in the biomedical field, fully taking into account the needs of recipient countries and their public health policies.

page 174
5.4 Developed countries, and pharmaceutical companies (including generic producers), should take measures to promote the transfer of technology and local production of pharmaceuticals in developing countries, wherever this makes economic sense and promotes the availability, accessibility, affordability and security of supply of needed products.

5.5 Developed countries should comply with their obligations under article 66.2 of the TRIPS Agreement and paragraph 7 of the Doha Declaration.

page 177
5.6 Developing countries need to assign a higher priority to improving the regulation of medical products. Developed countries, and their regulatory institutions, should provide greater financial and technical assistance to help attain the minimum set of regulatory standards needed to ensure that good quality products are available for use. This assistance should also support infrastructure developments within a country, to ensure that good manufacturing practice and supply chain management standards are implemented and sustained.

5.7 The process of the International Conference on Harmonisation currently lacks immediate relevance to the needs of many developing countries, but those countries should maintain their participation in the process. In the meantime, developing country governments and regulatory institutions should give support to regional initiatives, tailored to the current capacities of their member countries, which offer more scope for lifting standards over time, exploiting comparative advantages, avoiding duplication, sharing information and facilities, and promoting appropriate standardization without erecting barriers to competition.

5.8 WHO has an important role to play, in collaboration with interested parties, in helping to strengthen the clinical trials and regulatory infrastructure in developing countries, in particular in sub-Saharan Africa, including the improvement of ethical review standards.

5.9 Apart from the European and Developing Countries Clinical Trial Partnership, donors together with medical research councils, foundations and nongovernmental organizations, need to offer more help to developing countries in strengthening clinical trials and regulatory infrastructure.

page 187
5.10 Digital libraries of traditional medical knowledge should be incorporated into the minimum search documentation lists of patent offices to ensure that the data contained within them will be considered during the processing of patent applications. Holders of the traditional knowledge should play a crucial role in deciding whether such knowledge is included in any databases and should also benefit from any commercial exploitation of the information.

5.11 All countries should consider how best to fulfil the objectives of the Convention on Biological Diversity. This could be, for instance, through the establishment of appropriate national regimes for prospecting for genetic resources and for their subsequent utilization and commercialization; contractual agreements; the disclosure of information in the patent application of the geographical source of genetic resources from which the invention is derived and other means.

Saturday, April 29, 2006

Access to Traditional Knowledge and Genetic Resources without Misappropriation

This statement was summarized orally at the WIPO IGC on April 27, 2006. This is the written submission. James Love

Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore : Ninth Session (WIPO/GRTKF/IC/9)
Apr 24, 2006 to Apr 28, 2006
Geneva, Switzerland

Comments of Consumer Project on Technology

Access to Traditional Knowledge and Genetic Resources without Misappropriation
the Bellagio/Yale A2K proposal.

We will discuss briefly a proposal that was first developed in a November 20-25, 2002 Rockefeller Bellagio meeting, (Collective management of intellectual property, tacklliing the anticommons) and presented most recently by Dr. Manon Ress at last week’s meeting at Yale on Access to Knowledge (A2K).

We wil examine the issues of access and misappropriation, as relating to both Traditional Knowledge (TK) and Genetic Resources (GR).

Our starting point is not about fairness, but rather, what is in the self-interest of developing countries? We consider this question both for countries that are rich in TK or GR resources, and countries that are not.

Our proposal does not deal with many important issues, such as privacy, dignity, respect, identification of owners of TK or GR resources, or many other important topics. It is a narrow proposal.

It draws from the experience of the free software community, and it has implications for a wider set of problems that concern misappropriation, including important cases involving modern biomedical research.

As mentioned earlier, our starting point is the experience of the free software community. This is a community of persons who create software code, and who collaborate in software development, and also freely share the code with others. They were confronted with a problem of misappropriation. Companies were taking code that was in the public domain, making changes, and creating new commercial versions that were protected by copyrights, trade secrets and patents. The community that created the initial code did not have access to the new products.

The response by the free software community to this problem is interesting, because it was novel, controversial, and very successful. It is also very relevant to the WIPO discussions over protections for TK. The free software community, led by Richard Stallman and the Free Software Foundation, created a new copyright licensing strategy, around the GNU General Public License (GPL). This license gave anyone the right to use GPL’d code, for any purpose, including for commercial purposes, at a zero royalty. In return, however, the user of the GPL’d code had to provide the free software community royalty free access to the new product, including the new source code. Moreover, the new product would also be protected by the GNU GPL license. The “reach through” or “viral” aspect of the GNU GPL was quite important and effective. Today millions of lines of software code and thousands of important software programs are protected by the GNU GPL.

In the beginning, the GPL was attacked as “communistic,” anti-capitalist, overly restrictive or impractical by a legion of critics. But over time, many software and computer companies began to see the GNU GPL as a very useful device to ensure that collaboratively created knowledge goods continue to be resources that are widely available. Today IBM, Oracle, Sun and many other major corporations use the GNU GPL for important projects.

Now let’s return to a focus of this meeting, the protection of TK or GR resources. What is the relevance of the GNU GPL story to TK or GR resources? The free software community is, in many respects, similar to a community that creates TK resources. The difference is that the software programmers have an automatic intellectual property right -- copyright, which is easy to get (there are no formalities under the Berne Convention), and which they can license, under a variety of terms.

If a developing country created a sui generis TK or GR intellectual property right, it could be done in many different ways. If the sui generis right asserts exclusive rights over TK/GR resources, it may provide some opportunities for rent seeking when people use those resources, but this approach can also create or lead to monopoly controls over knowledge, which can be a bad outcome if everyone does the same thing. Most developing countries are net importers of TK and GR resources, so they need to consider the regime both as owners and as consumers. And, if other countries do not recognize a countries’ sui generis TK/GR regime, you are only hurting your own consumers.

The Bellagio/Yale/A2K proposal focused on a different strategy for the sui generis TK/GR intellectual property regime. In this proposal, the TK/GR right would not apply to any use of the TK/GR resource that was not patented. But when there is a patented invention that uses TK/GR resources, there would be an obligation for the patent owner to obtain a license to the TK/GR resources. But to avoid monopolies and promote innovation, there would be a mandatory compulsory cross-license on both the patented invention and the TK/GR sui generis right. The patent owner would have guaranteed access to the TK/GR resource, but the TK/GR owner (or owners) would also have guaranteed access to the patented invention.

Under the cross-licensing approach, there would be less monopoly power for the patented invention than would be the case if the TK/GR resource had been in the public domain. This is because the TK/GR owners would have the right to directly compete against the patent owner, if they choose to.

There is a precedent for this, in Europe. The European Directive on the Protection of Biotechnological Inventions provides for a mandatory cross-license between owners of patented inventions and owners of improvements in seeds protected by plant variety rights.
Article 12.1. Where a breeder cannot acquire or exploit a plant variety right without infringing a prior patent, he may apply for a compulsory licence for non-exclusive use of the invention protected by the patent inasmuch as the licence is necessary for the exploitation of the plant variety to be protected, subject to payment of an appropriate royalty. Member States shall provide that, where such a licence is granted, the holder of the patent will be entitled to a cross-licence on reasonable terms to use the protected variety.

The European Commission adapted this approach because it wanted to weaken the monopoly power in seeds enjoyed by two US patents owners, Monsanto and Dupont. In subsequent reviews, the mandatory cross-licensing program has been found to promote access to innovations.

A similar approach could be used for TK/GR resources. Because it is required by the TRIPS, there would have to be remuneration from the TK/GR owner to the patent owner, to use the patented invention. But there could also be remuneration from the patent owner to the TK/GR owner. This can provide a useful framework for meeting CBD obligations on benefit sharing.

This would clearly work to the benefit of a developing country if applied solely within it’s borders -- it would receive royalties from the patent owners, and it would also have the right to use the patented invention under the mandatory cross-license. But would it also be something that other countries would recognize?

Again, it would depend upon the implementation. But one approach involving cross-border pooling of TK/GR resources might be particularly effective in promoting recognition of the regime.

If a country (community) that “owned” TK/GR resources was willing to pool its resources with another country (community), the new co-owner in the TK/GR resources would have an incentive to recognize the cross-licensing scheme, because it would provide them with greater access to the patented invention.

A country (community) with few TK/GR resources would benefit from both greater access to the patented invention, and also from the reduction in patent monopoly power.

A country (community) with an abundance of TK/GR resources would benefit from greater acceptance of it’s sui generis right, including the receipt of remuneration for the use of the TK/GR resources in the larger market of countries (communities) that join the pool.

As a thought experiment, suppose every country in Latin American joined the pool. If the “ownership” of the TK/GR resources were everyone in Latin America, then everyone in Latin America would have the right to exploit any patented invention that relied upon any TK/GR resources in the Latin America. This is a big benefit.

It is easy to consider this thought experiment with Africa or Asia, or even the entire developing world. If the whole world entered the pool, you would move toward a global system of non-exclusive remunerative rights (liability rules) for many inventions.

Because of limited time, there are many details we cannot discuss today, which are important, and worth thinking about.

One is that the Bellagio/Yale proposal could be a model, or a basis, for thinking about a wider range of cases where public or community resources are misappropriated, including for example, cases involving important publicly owned biomedical databases, such as the SNPS, HAPMAP or Human Genome Projects, where issues of licensing and misappropriation have been problematic.

There is also an interesting discussion over optimal remuneration policies. One might think of GNU GPL software as a special case of cross licensing at a zero royalty. The free software movement clearly put the premium on access, rather than on remuneration. One wonders if programmers would have freely donated code to collaborative GNU GPL’d projects if there were issues over who would receive and control royalties.

For some problems, a zero remuneration might be the best. But for other cases, non-zero remuneration may lead to better development of patented technologies, and greater incentives for developing countries to protect, document, disseminate and share knowledge.

In closing, it is appropriate to note that many persons have provided helpful ideas and insights which we have shamelessly exploited, and criticisms we may have unfortunately ignored. Without implicating anyone in any aspect of the proposal, we are particularly grateful to the participants of the 2002 Rockefeller Bellagio meeting on collective management of intellectual property rights, Professors Peter Drahos, Ruth Okediji, Jerome Reichman and Carlos Correa, Tim Hubbard, Julia Oliva, Chee Yoke Ling, Martin Khor, Sisule Musungu, Tony Taubman and Richard Stallman for their insights into various aspects of this problem.

James Love
Manon Ress
27 April 2006

Tuesday, March 07, 2006

Bangladesh generic drug industry confronts Roche, Bird Flu

James Love
7 March 2006

Today I’m in Dhaka, Bangladesh, and have just heard a report about the Bangladesh domestic pharmaceutical sector. For 2005, the domestic firms claim that a startlingly 97 percent of pharmaceutical consumption was manufactured domestically, and that the multinational company share of the Bangladesh market (imported or manufactured domestically) was only 7 percent.

The Bangladesh pharmaceutical industry is growing at 12 percent annually. The size of the domestic market is about $.5 (USD) billion annually. In recent years the domestic firms have hired a number of engineers and scientists from India, and they are increasing their capacity to manufacture Active Pharmaceutical Ingredients (APIs).

The leading export pharmaceutical company from Bangladesh, Beximco, will likely announce next week that will be selling oseltamivir phosphate, a generic version of the drug, sold by Roche as Tamiflu, that is a treatment for a possible avian flu pandemic.

Beximco first wanted to purchase APIs from Hetro, an India generic firm. But when Hetro entered into negotiations with Roche to be an authorized supplier of generic oseltamivir, it was saddled with restrictive conditions on the sale of the product. Those restrictions would have been extended to Beximco also. Beximco would have been required to exclusively purchase APIs from Hetro, and Beximco would only be allowed to sell to the Bangladesh government, and not to the private sector, or to any other government.

Hetro sought to set its price for oseltamivir APIs based upon an index of the market prices for oseltamivir APIs by competitors. But it also asked for an additional 8 percent royalty for the sale of finished products. Beximco would also have been required to warrant that it would not infringe or violate any intellectual property rights of Roche or Gilead, which might be interpreted as a restriction on seeking a compulsory license or disputing a patent claim.

If the Hetro conditions are requirements imposed by Gilead/Roche, they would seem to raise antitrust concerns. Roche would appear to be seeking to leverage its monopoly position in countries where it has patents, to influence the market for generic APIs and finished products in countries where it does not have patents, and to reduce the possibility of non-controlled/affiliated Roche suppliers competing with Roche in markets where Roche controls the patent (as a generic supplier operating under a government use or compulsory license non-voluntary authorization to use a patent) or where there is no patent.

Moreover, the conditions imposed by Hetro clearly serve to reduce the global supply of generic oseltamivir, at a time when the world is facing a possible global avian flu pandemic, and Roche is unable to meet orders for government stockpiles, and is charging hefty prices that discourage both public and private stockpiling of the medicine.

Beximco rejected the Roche/Hetro restrictions, and will be selling without a license from Roche. It will be buying APIs from CIPLA (another India generica firm) for now, but it plans to manufacture its own APIs for oseltamivir later.

As the domestic Bangladesh pharmaceutical industry is taking off, there has been a flurry of patent applications in Bangladesh. Bangladesh, which only became independent in 1971, has had a domestic patent law dating back to 1911 (the colonial act), which includes product patents. But until recently, few patents were filed in Bangladesh. But now that India’s patent law has been changed, companies are seeing Bangladesh as the new India, and they are filing patents here in significant numbers.

The domestic industry here sees its LDC status as a strategic advantage. Bangladesh could amend its domestic patent law to eliminate patents on pharmaceutical products, until at least 2016, and it can freely export medicines without worrying about the WTO’s complex 30 August 2003 decision. Bangladesh apparently cannot lose its LDC status until 2012 at earliest, because its per capita income is considerably below the UN threshold for LDCs.

The problems Bangladesh faces are twofold. First, the government has not been able to change its own patent law to take advantage of (paragraphs 4,5, and 7) the Doha Declaration on TRIPS and Public Health. Second, the domestic firms need a more professional and widely respected regulatory mechanism. Apparently they could support something through user fees. They want something that has independence, and competence. They are not sure how to get something like this off the ground here, and are asking for advice.

Saturday, December 17, 2005

NGOs call for WTO Moratorium on Regional and Bilateral Trade Agreements on Intellectual Property and Medicine

This is a joint NGO statement distributed at the Hong Kong WTO Ministerial on December 17, 2005.

December 17, 2005

Joint NGO Statement on Need for WTO Moratorium on Regional and Bilateral Trade Agreements and Policies Undermining Access to Health

The following NGOs call upon WTO Members and their trade negotiators to protect the public from the explosion of one-sided and harmful regional and bilateral trade agreements that impose TRIPS plus obligations on developing countries that undermine access to medicine. These include but are not limited to:
  1. Restrictions to the grounds for compulsory licensing,
  2. Restrictions on parallel trade,
  3. Controversial obligations to create exclusive rights to the test data used to register new drugs,
  4. Extensions of patent terms beyond 20 years,
  5. Obligations for drug regulators to enforce patents of dubious validity or relevance, and
  6. Obligations to grant patents on second uses of medicines.
These regional and bilateral trade agreements are the product of very unequal power relations. They are a deliberate effort to undermine the multilateral trading system. They are contrary to the values expressed in the 2001 WTO Doha Declaration on TRIPS and Public Health.

Unless the WTO can place meaningful restraints on such trade negotiations, consumers, including poor consumers, will not be protected from the effects of excessive and inappropriate intellectual property rules.

We ask that Members agree to a moratorium on any new bilateral and regional trade agreements that include provisions involving intellectual property rights and medicines, and that all WTO Members agree they will not enforce any provisions in such agreements that are contrary to the 2001 Doha Declaration on TRIPS and Public Health.

We can no longer tolerate public officials patting themselves on the back for laudatory declarations on access to medicines that are not backed up by actions, and which are not only ignored in practice, but which are actively subverted in these regional and bilateral agreements.

We ask these issues be specifically addressed in the spring meeting of the WTO that follows the Hong Kong Ministerial.

Signed (Listed alphabetically)

Act Up-Paris
ALCS (Association de Lutte Contre le Sida)
All India Drug Action Network
Consumer Project on Technology
Consumers International
Consumers Union
Diverse Women for Diversity
EATG (European AIDS Treatment Group)
Foundation for Consumers, Thailand
FTA Watch, Thailand
Health and Development Foundation, Thailand
International Peoples Health Council
MSF Access to Essential Medicines Campaign
Oxfam International
People’s Health Movement
Peoples Health Network
Research Foundation for Science, Technology and Ecology
Thai Drug Study Group
The Global Network of People Living with HIV/AIDS (GNP+)
Third World Network

Thursday, December 01, 2005

No gift to the poor: Strategies used by US and EC to protect big pharma in WTO TRIPS negotiations

On Friday, the WTO TRIPS council will apparently meet again to try to agree upon a permanent amendment to the TRIPS agreement, in theory to make it easier to export medicines manufactured under a compulsory license. There is a lot of drama over this negotiation, and it illustrates the way a WTO negotiation can turn the whole notion of free trade upside down, how it can promote protectionism, and how firmly the big drug companies are in control of the US and EU negotiators, and how closely they work with WTO DG Pascal Lamy,L'ancien commissaire européen au commerce Pascal Lamy au siège de l'OMC à Genève, le 26 janvier 2005. | AP/NICHOLAS RATZENBOECK the former top EC trade official.

In 2001, the WTO adapted a very good declaration on TRIPS and public health. This declaration has seven sections (referred to somewhat inaccurately as paragraphs), which among other things, says that WTO members should implement the TRIPS obligations in “a manner that promotes access to medicines for all.” Ever since then, big pharmaceutical companies have tried to undermine if not overturn this declaration. The main vehicle for this mischief has been the one paragraph (para 6), which promised a “solution” to one of the obvious flaws of the TRIPS agreement -- the restrictions on exports of products manufactured under a compulsory license.

The source of this problem, Article 31.f of the TRIPS, limits exports to less than half of production. This is a big problem for countries with small domestic markets, because they just won’t have the economies of scale for efficient production if they can’t export. It is also a problem for big countries, even the United States, if they lack the capacity to manufacture a product -- such as the case today for Tamiflu, the drug for treatment of avian flu, because countries big or small will not be able to find foreign suppliers of needed generic medicines.

Trade officials in the US and the EC understand perfectly well that if they make the system of compulsory licensing of medicines inefficient enough, it won’t be used much. So they focused on the para 6 implementation with the intention of making it work poorly. They also decided they could use this negotiation to introduce all sorts of new precedents within the TRIPS, that never existed before, such as WTO oversight and reporting for each compulsory license, new procedures for issuing licenses that make it more risky and burdensome for generic suppliers, and creating new opportunities to trigger bilateral pressure on countries to prevent them from actually using compulsory licenses.

They also tried in 2002 and 2003, unsuccessfully, to restrict the diseases that would be covered by the agreement, seeking to undermine the broader nature of the 2001 agreement.

When head of DG-Trade, Pascal Lamy was the main architect of this strategy for the EC.

Policy in the US was dictated at the highest levels of the White House, out of the office of Karl Rove, in close consultation with big pharma companies, and particularly Pfizer CEO Hank McKinnnell, who helps raise a lot of money for Rove’s various political projects.

On 30 August 2003, a "temporary" solution to para 6 of the Doha Declaration on TRIPS and Public Health was announced. It was a very complex and limited set of procedures for overcoming the 31.f restriction, which actually made consumers everywhere worse off, because it not only created new precedent for burdensome procedures, but it had the practical effect of making two other possible legal mechanisms for authorizing exports less feasible, on political if not legal grounds. It was widely criticized by virtually all public health, consumer and development NGOs following the negotiations.

Worse than the text of the 30 August 2003 decision was a long Chairman's Statement which gave a restrictive interpretation of the agreement, and further narrowed the utility of the 30 August 2003 decision. The "Chairman's statement, which was read at the WTO by General Council chairperson Carlos Pérez del Castillo, Uruguay’s ambassador to the WTO, was approved by Pfizer CEO McKinnell and Karl Rove's office.

(In 2005, Castillo ran for the position of DG of the WTO, but was defeated by Lamy, who now holds the post).

The negotiations over para 6 of the Doha Declaration on TRIPS and Public Health were widely considered a disaster by the public health community, and also by many developing country delegates. The US and EC obtained the deal by relentlessly focusing on the African negotiators, and pressuring them to keep the Asian and Latin American countries from having any meaningful role in the final negotiations. Enormous pressure was applied to African countries, and in the end, they agreed to a package that was not only complicated and restrictive, but also highly protectionist -- by design.

The African countries were promised they could use the agreement to keep the Asian and Latin American producers out of the African market, which would have been more relevant if the African generic producers actually had the capacity to efficiently manufacture the active pharmaceutical ingredients (APIs) that were key to the manufacturing of medicines. The US and the Europeans were also given the right to "opt-out" of the agreement as importing countries, so they could favor domestic producers even in cases where they issued a compulsory license. So much for free trade.

Despite its twisted outcome, the WTO trumpeted the 2003 deal as a great gift to the poor, partly to mask the paucity of progress on development issues, such as agricultural subsidies.

Now a little more than two years later, with the Hong Kong Ministerial having made no visible progress on real development issues, Lamy, the EC and the US are again pushing hard on the same issue -- this time to make the temporary waiver of 31.f permanent. At the same time, they are seeking to elevate the legal status of the 2003 Chairman’s Text -- actually making consumers worse off.

There are many aspects of this, and here are just a few. The Africa Group made a very good proposal in February 2005 for a much better permanent amendment. It was opposed by the US and the EC. The EC and then the US then focused once more on the African negotiators, and apparently succeeded in completely taking off-the-table the highly regarded February proposal, and replacing it with something that would simply make the 2003 agreement permanent. The US and the EC are also pushing to elevate the legal status of the 2002 Chairman’s Statement, which would make generic producers and consumers worse off.

There is little information about what is going on in terms of the trade-offs, but it is clear that the US and the EC have decided they can use the African negotiators to undermine the positions advocated by Asian and Latin American negotiators.

Bird Flu debate

Meanwhile, the global debate over access to medicines for a possible avian flu pandemic have raised awarness of some of the more obvious reasons a country would not want to "opt-out" as a possible importer of this mechanism.

The 30 August 2003 decision lists some 23 countries that say they will opt-out of the mechanism, even in cases of a public health emergency or pandemic. The Chairman's statement expanded that list, to now include:

Australia, Austria, Belgium, Canada, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom and United States of America.

None of these countries can currently obtain enough generic versions of Tamiflu to fill national stockpiles, and only a couple could actually manufacture the vaccines they would want should a pandemic break out. There has been no press coverage of this at all in the mainstream US press, and almost nothing in Europe either.

(I have written about this on two occasions in the Huffington Post (1,2).

Meanwhile, the US and the EC both refuse to meet with public health groups to discuss the obvious risk to public health of opting out of the decision, and they are rushing to make this opt-out permanent before the December Hong Kong WTO meeting.

Earlier this week the US, the EC and the WTO DG Lamy were able to announce a new deal on a related TRIPS issues -- the requested extension for Least Developed Countries to comply with TRIPS. In 2004 these countries had an average per capita income of less than $1 per day. The LDCs wanted a 15-year extension. They got half that, but with several strings, including a requirement for extra cooperation beginning in 2008 to implement the TRIPS agreement, and most important, a pledge that there will be no “backtracking” for countries that have already implemented the TRIPS obligations -- which most have. This too was presented as gift to the poor.

James Packard Love
December 1, 2005

Tuesday, November 29, 2005

Getting out of Iraq

Today's debate about leaving Iraq is something we needed before we invaded. The daily news about Iraq is a constant reminder that I live in a country that has been reeling toward intolerance, incompetence, aggression and all of the distasteful things that seem to accompany an occupation. These problems are particularly transparent, from the petty to the horrific.

The shredding of our civil liberties at home, the official support for torture, secret (but not that secret) overseas gulags, the appalling situation at Gitmo, the discussions of bombing al-Jazeera and in today’s New York Times, this report by John Burns on how the US and Iraqi officials cut off cameras in the Saddam Hussein trial, in order to prevent his criticism of the occupation to be heard on television. The US even finds it necessary to take away a poem he wrote, saying "truth is our characteristic. . . lying is theirs."

In the same edition of the NYT Dexter Filkins reports on the evidence that Iraqi security services are engaged in extensive executions of Sunni civilians. "Some Sunni males have been found dead in ditches and fields, with bullet holes in their temples, acid burns on their skin, and holes in their bodies apparently made by electronic drills." This is apparently how we are making "progress" in Iraq. It is also how we are creating a legacy that will haunt us for many years to come, and undermine so many other things that the United States could do in the world.

Journalists like Judy Miller, Bob Woodward and their colleagues are shocked at the hostility of the public toward them, but what is her or his or their friends' role in promoting or inconveniencing the militarization of foreign policy, and such a hideous transformation of our country? Indeed, what do any of us do to really oppose these terrible things?

Congressman Murtha's call for a relatively quick exit from Iraq has now made it politically safer for members of Congress to actually talk about the future of this occupation, and to insist that we are not planning for a permanent occupation.

If we had insisted on an exit plan before we invaded, it would have required someone somewhere to think through the consequences of the military actions, toward the end game.

Today is a confrontational debate over how fast to exit Iraq, or if there should be a time table at all. I suggest the debate should be not on the need for a single plan, but rather on the need for several exit strategies - one for 6 months, one for 2 years, one for 5 years, for starters. None of these plans need be mandatory to execute, but they should be mandatory to have. The idea is that the public should look at a variety of options, all involving getting out of Iraq, and see which options are the most attractive.

It may be the case that a 6 month withdrawal is not going to look pretty. But it isn't necessarily the case that the longer occupation looks better. In any case, by creating options, that are at least feasible and fleshed out, you can have a real debate of a future that does not involve the US trying to annex by force Middle Eastern countries. It is rather astonishing that we don't have any real plans to get out at this point. That needs to change.

James Packard Love