[Intl-tobacco] WSJ: Tobacco Deal Haunts Mexican Contender for WHO Chief

[robert weissman]

Tobacco Deal Haunts
Contender for WHO Chief

Seen as Industry Blueprint,
Pact With Cigarette Makers
May Be Dr. Frenk's Undoing
By *JOHN LYONS* in Mexico City and *BETSY MCKAY* in Atlanta
October 24, 2006; Page A6

Julio Frenk was a finalist for the top job at the World Health
Organization three years ago. The post is available again, but the
Mexican health minister's latest campaign for the job may go up in smoke.

This year, several public-health experts criticized a deal Dr. Frenk cut
with cigarette makers, saying it undermined Mexico's efforts to reduce
smoking. That has helped foster attacks on Dr. Frenk by antismoking
groups in the run-up to the Geneva-based organization's selection of a
new director-general on Nov. 8.

In the June 1, 2004, deal, Philip Morris of Mexico -- a joint venture of
Altria Group <http://online.wsj.com/quotes/main.html?type=3Ddjn&symbol=3Dmo=
>
Inc. and Latin America's richest man, Carlos Slim -- and the Mexican
unit of British American Tobacco
<http://online.wsj.com/quotes/main.html?type=3Ddjn&symbol=3Dbti> PLC agreed
to donate about $400 million over 2=BD years to fund new health programs
of the Health Ministry's choice. The catch was that the donations would
be rescinded if new taxes were levied on cigarettes.

The arrangement essentially forced the ministry to protect cigarette
companies from tax increases for the deal's duration, and set a
precedent for cigarette companies negotiating regulatory terms with
governments, its detractors say.

Dr. Frenk defends the deal. "Taken out of context, the agreement may
look very suspicious," Dr. Frenk said. "But it was a middle point, and
part of a larger strategy that has been successful. This was not a
friendly deal for the cigarette companies."

The arrangement reaffirmed regulations on cigarette advertising and
warning labels that are weaker than the voluntary standards in a WHO
treaty called the Framework Convention on Tobacco Control. That rankled
antismoking advocates who say the 140 nations that have signed the
treaty made a commitment to adopt a uniform strategy for regulating
tobacco companies and reducing smoking. The agreement with the tobacco
companies was announced four days after the Mexican congress ratified
the treaty.

"Implementing the treaty is going to be a priority for the WHO, and the
next director-general needs to have a clear commitment to the issue,"
said Damon Moglen, vice president for international programs at the
Campaign for Tobacco-Free Kids, which issued a news release critical of
Dr. Frenk.

Several cigarette-industry observers said they knew of no other
countries that have entered into similar agreements with the tobacco
industry thus far. Francisco Espinosa, a spokesman for Philip Morris of
Mexico, said the cigarette agreement "represents a very courageous act
by Dr. Frenk to pursue an aggressive antitobacco agenda."

The attention on the cigarette deal highlights the expanding reach of an
antismoking movement into Mexico and other developing nations. It also
raises the fundamental question of what is the best way to try to combat
smoking in such nations, where courts and regulatory bodies are often
less independent and corporate power more concentrated than in the U.S.
and Europe, leading regulators to adopt unorthodox strategies to achieve
their aims.

The WHO post opened up when the former director-general, Lee Jong Wook,
died unexpectedly in May, setting off a politically charged campaign for
WHO chief. Dr. Frenk, a 52-year-old former senior WHO official, isn't
the only one facing questions. For example, China's candidate, Margaret
Chan, is under fire over her nation's lack of transparency in combating
SARS. In all, 13 candidates from countries such as Japan, Finland,
France and Mozambique are vying to head the United Nations health agency.

[mexwho]

In an interview, Dr. Frenk described the cigarette deal as a "tactical
move" that reflected the weakness of the Mexican legal system and the
restraints of the budgetary process. Negotiating an agreement allowed
Mexico to immediately impose advertising and other restrictions on
tobacco companies, whose lawyers might have easily thwarted such
restrictions using broad injunction powers often used by Mexico's
powerful monopolies to deflect regulations.

In a country where it is difficult to earmark tax revenue for certain
projects, the deal also guaranteed funding for his broader plan to
expand catastrophic health insurance for the poor.

What is more, Mr. Frenk described the arrangement as an intermediary
step that set important precedents for regulating cigarette companies,
paving the way for stronger, enforceable laws. Indeed, the Health
Ministry is preparing to send Congress a bill that would convert the
cigarette-company contribution into an actual tax, as well as bring
advertising and other restrictions up to WHO standards.

As Mexico's health minister since 2000, Dr. Frenk has employed various
tactics to improve public health and reduce smoking. He forced through
tax increases on cigarettes, as well as introduced a ban on smoking in
schools and government buildings. He is also the first Mexican health
minister to actively push restrictions on cigarette sales -- efforts
that have helped cut total cigarette sales in Mexico during his term.

Indeed, Dr. Frenk retains support for his WHO bid, even among some
critics of the tobacco arrangement. "If you take the totality of what he
has achieved in Mexico, he has brought about one of the most
extraordinary improvements in health care in low-income countries," says
Derek Yach, a former WHO official who has criticized the deal with
cigarette makers. The Lancet health journal has endorsed Dr. Frenk.

Dr. Frenk, a physician who holds doctorates in health and sociology from
the University of Michigan, used the money to expand health-care
coverage for the poor to include neonatal intensive care and the
catastrophic costs of diseases. The money has also funded a new
cancer-treatment facility, and the Health Ministry has opened hundreds
of smoking-treatment clinics.

However, critics point out that the deal presented some ethical binds.
In October 2005, Dr. Frenk opposed legislation that would have increased
taxes on cigarettes as a way to deter smoking, especially among teens.
The new taxes would have scuttled his deal. Dr. Frenk argued against the
bill in a meeting with lawmakers and complained in Mexico's daily El
Universal newspaper that the proposed increase would sink his
arrangement with the cigarette companies. Congress eventually defeated
the tax increase.

That raised concerns that the Mexican arrangement could be used as a
cigarette-industry blueprint for negotiating regulations and heading off
new taxes.

In February 2006, Jonathan Samet, chairman of epidemiology at the Johns
Hopkins Bloomberg School of Public Health, teamed with other health
experts, including Dr. Yach, to critique the deal in the British Medical
Journal. The article, titled "Mexico and the tobacco industry: Doing the
wrong thing for the right reasons?" was published in time for a summit
of health officials in Geneva to discuss smoking prevention.

*Write to *John Lyons at john.lyons@wsj.com <mailto:john.lyons@wsj.com>
and Betsy McKay at betsy.mckay@wsj.com <mailto:betsy.mckay@wsj.com>