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Africa: Contested Compromise on Generic Drugs
AFRICA ACTION
Africa Policy E-Journal
September 3, 2003 (030903)
Africa: Contested Compromise on Generic Drugs
(Reposted from sources cited below)
A last-minute World Trade Organization compromise in Geneva on
intellectual property protection and access to medicines is being
heralded by some as finally opening the doors to imports of generic
medicines by poor countries without a manufacturing capability. In
intense negotiations in recent months, the U.S. reached behind-thescenes
agreements with key countries such as Brazil, India, South
Africa, and Kenya. The U.S. and the international pharmaceutical
industry made some concessions after blocking an agreement for
almost two years. However, the compromise also imposes extremely
complicated procedures designed to protect patent rights, which
leave enormous obstacles to overcome before affordable medicines
are actually made available.
The World Health Organization and treatment access activists stress
that the real test will be whether affected countries and
international agencies take full advantage of their right to put
public health before patent rights. In a speech in Johannesburg on
September 1, Dr. Lee Jong-wook, Director-General of the World
Health Organization (WHO), proposed a response strategy called "3
by 5" which aims to provide 3 million people living with AIDS with
antiretroviral medicines by the end of 2005. For this to happen,
rich countries would also have to provide new financial resources
for expanded purchase of generic drugs. UNAIDS estimates that
approximately 480,000 people could be treated immediately if
resources were available, such as through additional funding for
the Global Fund to Fight AIDS, TB, and Malaria.
This posting contains several statements and background analyses on
the decision, which came less than two weeks before the beginning
of the World Trade Organization summit in Cancun, Mexico.
Additional related resources:
(1) New York Times, September 3, 2003
"African HIV/AIDS Patients Show Better Adherence to Antiretroviral
Drug Regimens Than U.S. Counterparts"
http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=19651
(2) Doha Derailed: A Progress Report on TRIPS and Access to
Medicines - Medecins sans Frontieres, August 2003
http://www.accessmed-msf.org/documents/cancunbriefing.pdf
+++++++++++++++++end summary/introduction+++++++++++++++++++++++
(1) World Trade Organization Statements - August 30, 2003
DECISION REMOVES FINAL PATENT OBSTACLE TO CHEAP DRUG IMPORTS
WTO member governments broke their deadlock over intellectual
property protection and public health today (30 August 2003).
They agreed on legal changes that will make it easier for poorer
countries to import cheaper generics made under compulsory
licensing if they are unable to manufacture the medicines
themselves.
Press release:
http://www.wto.org/english/news_e/pres03_e/pr350_e.htm
Decision on implementation of paragraph 6 of the Doha Declaration
on the TRIPS Agreement and public health:
http://www.wto.org/english/tratop_e/trips_e/implem_para6_e.htm
[full 6-page decision with 11 points and 9 notes]
(2) World Health Organization http://www.who.int
Statement of the World Health Organization on WTO access to
medicines decision
1 September 2003 -- The World Health Organization (WHO) is
encouraged by the consensus reached by Members of the World Trade
Organization (WTO) on the issue of access to medicines by
countries with little or insufficient capacity for pharmaceutical
production.
The agreement covers all medicines. Among the diseases that could
be more effectively tackled as a result of this decision are
AIDS, tuberculosis and malaria.
WHO will work with the countries which could make use of the new
arrangements to assist them to achieve the full public health
benefit from the lower prices. Given the urgency of the health
needs in the poorest countries, the work to implement this
agreement must proceed as quickly as possible. The full impact of
the agreement will depend on how effectively it can be
implemented in countries.
For the agreement to have the intended impact on public health,
countries will need to review the full range of medicines
required from multiple suppliers, including generic producers,
when making purchasing decisions.
WHO continues to urge Member States to consider using to the full
the TRIPS flexibilities with regard to the protection of public
health.
For more information contact:
Daniela Bagozzi
Telephone: +41 22 791 4544
Email: [email protected] <mailto:[email protected]>
Iain Simpson
Telephone: +41 22 791 3215
Email: [email protected] <mailto:[email protected]>
Melinda Henry
Telephone: +41 (22) 791 2535
Email: [email protected] <mailto:[email protected]>
(3) Oxfam Statement
Oxfam: WTO patent rules will still deny medicines to the poor
August 30, 2003
After two years of intense wrangling, the World Trade
Organisation (WTO) appears to have reached an agreement on drug
patents.
The deal was apparently brokered tonight at an informal meeting
and could be officially confirmed tomorrow morning. If this deal
is confirmed, the result would be a severe disappointment, says
international agency, Oxfam.
It was hoped that the deal would secure developing countries
greater access to low-cost copies of medicines. But thanks to the
intransigence of the US and pharmaceutical giants, poor countries
would still not have the same legal rights to affordable
medicines as industrialised countries.
Oxfam's Head of Advocacy in Geneva, Celine Charveriat said: "If
agreed by the WTO, developed countries will trumpet this change
to WTO patent rules as a big concession, but the proposed deal is
largely cosmetic and will not make a significant difference to
the millions of sick people who die unnecessarily in the Third
World every year."
Developing countries successfully stopped the US and the
pharmaceutical lobby from excluding many diseases from the deal -
an important achievement. However, the proposed deal still
contains serious flaws. No matter how desperate the health need,
a developing country without the capacity to produce a needed
drug (which is virtually all of them) will have to ask another
government to suspend the relevant patent and license a local
company to produce and export it. Few countries, if any, will be
prepared to help other countries in this way, as it would provoke
retaliation by the US which fiercely defends the commercial
interests of the pharmaceutical corporations.
Furthermore, the agreement is wrapped in so much red tape that it
becomes largely unworkable - it amends a clause of only 20 words,
yet runs to more than seven whole pages. In practice, most poor
countries will end up paying the high price for patented
medicines or, most probably, doing without.
The change in patent rules was promised by the WTO Ministerial
Conference in Doha in 2001 in its landmark Declaration on TRIPS
and Public Health.
Charveriat added: "If confirmed, the deal would be a betrayal of
the pledge made in the Doha Declaration to put public health
before patent rights. It is profoundly unfair to create fresh
legal obstacles for developing countries trying to obtain
affordable generic medicines, purely in the interests of an
industry that in the US alone made US$37 billion in profit last
year. This decision would raise questions about who really makes
policy in the WTO, and is a bad omen for the upcoming WTO summit
in Cancun".
The international agency insisted that if the deal goes ahead it
would not put a stop to efforts by developing countries and
pressure groups to build on the important gains of recent years,
such as the Doha Declaration and the reductions in the price of
AIDS drugs. Indeed, this outcome would strengthen the need for a
thorough revision of the TRIPS Agreement with a view to taking
developing countries out of the TRIPS straightjacket altogether.
Ends
For more information please contact Amy Barry in Oxfam's press
office on 0044-7980664397 or [email protected] or Celine
Charveriat in the Geneva office at 0041-79-668-6477.
(4) Healthgap Background Analysis
HealthGap Listserv (sign-up at http://www.healthgap.org)
The incredible shrinking Doha Declaration
Brook K. Baker, Health GAP, August 26, 2003
With the new Chairman's Statement on Paragraph 6, dated August
21, 2003, it is easy to discern the U.S.'s latest plan to shrink
the Doha Declaration to a totally ineffectual platitude with no
real capacity to deliver cheaper, standard-quality generic
medicines to countries that lack the same capacity to produce
medicines efficiently as the U.S. does. In essence, the U.S. has
engaged in a two-part squeeze play creating "the incredible
shrinking Doha Declaration."
On one end of the vise, the U.S. has tried to limit countries
that are permitted to import generic medicines pursuant to a
compulsory license to address a public health need in four ways.
First, the U.S. brokered an absolute agreement from 23 relatively
rich countries that they would not issue compulsory licenses for
importation under any circumstances. Obviously, many of these
countries are large enough and have sufficiently robust generic
industries to issue a compulsory license for domestic production.
But still the U.S. has succeeded in shrinking the richest part of
the international market, essentially engaging in protectionism
at a historic level. Second, the U.S. convinced some other,
generally smaller or poorer countries (12 in all [note: China was
listed twice!]) to agree to issue compulsory licenses for import
only in order to address national emergencies or other
circumstances of extreme urgency. Another piece of the potential
market for generic medicines was thereby lopped off, certainly
including some countries that don't need to import (China) but also
including countries that have no domestic capacity whatsoever
(Qatar).Third, the U.S., and presumably the E.U., forced the E.U.
accession countries, 10 in all, to import only on an emergency or
urgency basis and to relinquish even this right upon accession into
the E.U. This will certainly have a devastating impact on the
costs of medicines in some very poor Eastern European countries,
including some that are facing an escalating HIV/AIDS crisis.
To this total of 45 countries that have expressly relinquished
their sovereign right to import generic medicines for public
health purposes pursuant to a compulsory license, the U.S. has
imposed a fourth condition that threatens importation for many
other middle-income developing countries. Basically, the U.S. has
set up a notification-and-review process whereby countries that say
that they need to import generics because of incapacity in their
pharmaceutical sector will be forced to prove and then defend
such determinations. The standard for proving "insufficient
capacity" is already terribly uncertain. Accordingly, the
reporting-and-review process will, as a practical matter, deter
countries from risking involvement in a damaging and costly WTO
dispute resolution process simply because they could import
generic medicines much more cheaply than they could produce them at
home. This prove-and-review standard doesn't name countries, but it
will certainly have a deterrent effect on countries which might try
to import cheaper generics.
Accordingly, this demand-end of the vise is designed to
dramatically shrink the potential market for generic drugs and to
exclude virtually all markets with meaningful and stable
purchasing power.
At the other end of the vise, the supply end, the U.S. is trying
to dramatically increase the risks and costs of producing generic
medicines for export. In part, the risk factors for generic
producers include the shrinking markets mentioned above. In
particular, generic producers will be uncertain whether a
particular country has properly determined that it lacks
sufficient pharmaceutical capacity or that there is a public health
emergency - a decision that can not only be reviewed in the WTO,
but a decision that might prompt a lawsuit by a patent-holder.
Moreover, the U.S. is also adding to the direct costs of
manufacturing generic medicines by its overly stringent
anti-diversion standards, which should more accurately be called
bloated-pricing standards. As amply described by DG Shah's
Comments on the draft Chairman Statement, varying pill size,
shape, and color is not cost-free, particularly when moving from
round, white tablets or capsules. Although there may well be some
sense in not using a proprietary name (a trade mark infringement)
or the same packaging, there is virtually no sense in adding
dramatically to costs (and potential bio-availablity) by changing
size and shape. This added and unnecessary cost burden is
especially eggregious, as DG Shah points out, when you might have
to change trade dress, size and shape for multiple small markets.
Shrink the market, increase costs, and add burdensome procedural
requirements - is that the simple and efficient solution promised
at Doha? The answer is obviously no. And the answer is no
because the U.S. remains more committed to maximizing profits for
the most profitable industry in the world, Big Pharma, than it is
to the million of lives at stake.
Activists are accused of rhetorical excess when we talk about
trade barriers, intellectual property barriers, and lives hanging
in the balance. To bureaucrats in the USTR these lives are
literally and casually traded for profit - profit for the
pharmaceutical puppet masters who hide behind the scene and pull
the strings. Unfortunately, for reasons that cannot be fathomed,
certain developing countries, including some in leadership
positions and that face escalting public health dilemmas, are
content to trade their citizens' health for minor reductions in
farm export subsidizies or for temporary access to textile markets
(before an even cheaper producer arrives on the scene). In other
words, the responsibility for the incredible shrinking Doha
Declaration certainly rests primarily with the U.S. (and
secondarily with the E.U. and Japan), but developing countries are
becoming complicit in their own destruction.
When unified in the aftermath of the Anthrax scare, developing
countries succeeded in overpowering the U.S. bully-boys and
producing the Doha Declaration. Now, they are letting the
world's biggest bully talk them and conditionalize them to death.
Not only should they reject the Chairman's draft statement, they
should reject the Motta text of December 2002. It too contained
too many compromises of vital interests. Developing countries
would do better to rely on the text of the Doha Declaration and the
flexibilities of the TRIPS Agreement. Then willing generic
producers could export under Article 30 (permitting limited
exceptions to patent rights) to willing importers that have
issued compulsory licenses. People living with diseases need a
full-size, fully operational Doha Declaration, not a shrunken pale
imitation ghost-written by the U.S. pharmaceutical industry.
(5) Statement from Consumer Project on Technology
CPTech Statement on WTO deal on exports of medicines
August 30, 2003
James Love (home +1.703.522.4380, cell +1.202.361.3040, work
+1.202.387.8030, [email protected]).
Consumer Project on Technology
http://www.cptech.org/ip/health
"Today's decision on the implementation of paragraph 6 of the
Doha Declaration on TRIPS and Public Health puts the WTO into
unchartered waters. The WTO secretariat, the TRIPS Council and
the Chair of the TRIPS council will now begin to routinely
review the issuance of individual licenses, and the WTO will now
as a matter of expected practice, oversee the use of compulsory
licensing in the most intimate terms, looking at the terms of
individual licenses, evaluating the basis for deciding
manufacturing capacity is insufficient, or reviewing or second
guessing any of the new terms and obligations that the new
implementation language introduces into the regulation of
compulsory licensing of patents on medicines.
The persons who have negotiated this agreement have given the
world a new model for explicitly endorsing protectionism. The
United States, Europe, Canada, Australia, Japan and other
developed economies will be allowed to bar imports from developing
country generic suppliers -- under completely irrational
protectionist measures that are defended by the WTO Secretariat and
its most powerful members as a humanitarian gesture.
"The European Commission's DG-Trade has engineered this agreement
as an attack on a position endorsed by its own parliament that
was a far more elegant and rational solution to the export issue.
The EU Parliament Amendment 196 was 52 words. The new WTO deal
is more than 3,200 words. The extra 3,150 words were not needed
and will create a morass of uncertainty and gamesmanship. The new
deal will predictably be used to prejudice other more useful
export strategies under Articles 30 or 31.k of the TRIPS
agreement.
"The new agreement has very modest benefits, and it has very
substantial costs, risks and uncertainties.
"On the positive side, the new agreement completely rejects the
efforts of the US, Japan, the European Union and the WTO
Secretariat to limit the scope of diseases for compulsory
licensing, and it also does not require high standards such as
epidemics or emergencies. Routine public health problems can be
addressed in the new agreement. The developing countries did
hold the line on this, under enormous pressure from major
pharmaceutical companies and the trade delegates who lobby on
behalf of the biggest pharmaceutical companies.
"The next step for public health activists will be to be more
pro-active on trade and public health, both locally and
globally Locally it is now time for countries to give effect to
paragraph 4 of the Doha Declaration, and actually issue compulsory
licenses to promote access to medicine for all. If it can be said
at the WTO, it can be done back home.
Globally, it is now time for NGOs to take greater control of the
global debate over how best to fund R&D. On the hand, we have
scenarios of ever increasing shares of GDP being spent to
support a largely non-innovative big pharma system of extremely
costly marketing efforts, and a growing police state designed to
stop the trade in expensive medicines. On the other hand, there
are new ideas on how trade agreements should more efficiently
address global support for R&D, and new ideas on how to best fund
innovation for new medicinal products. We think the latter
agenda is better for everyone."
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Date distributed (ymd): 030903
Region: Continent-Wide
Issue Areas: +health+ +economy/development+
The Africa Policy E-Journal is a free information service
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