[Ip-health] Guardian: late deal on cheap drugs

[Nathan Ford]

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Late deal on cheap drugs

Charlotte Denny and Sarah Boseley

Thursday August 28, 2003

The Guardian

An eleventh hour deal to provide cut-price drugs for the world's poorest pe=
ople was being finalised in Geneva last night in an effort to save next mon=
th's trade summit in Cancun, Mexico, from collapse.

After being delayed for nine months by intense lobbying from US pharmaceuti=
cal companies, the agreement between key developing countries and Washingto=
n is meant to open the door for poor countries to import copies of life-sav=
ing drugs without running foul of global patent laws.

But fears expressed by US pharmaceutical companies, led by Pfizer, that rel=
axing the rules would open western markets to a flood of copycat drugs, hav=
e forced poor countries to accept strict safeguards against smuggling.

The deal represents a climbdown for Washington which has single-handedly bl=
ocked agreement at the World Trade Organisation's Geneva headquarters since=
 December, demanding that the patent override be restricted to the poorest =
countries and for a limited list of diseases.

Agreement was secured after the US agreed instead to accept assurances from=
 developing countries that they would not bend the rules for "commercial ob=
jectives".

Diplomats said a deal on drugs was the bare minimum needed to prevent next =
month's summit of trade ministers in Cancun turning into a rerun of the WTO=
's disastrous Seattle meeting, which ended in chaos after African countries=
 walked out.

Even now, heated disagreements over agriculture and whether the liberalisat=
ion of trade should be extended into new areas are clouding last-minute pre=
parations for next month's meeting.

Washington was under intense pressure to deliver a package on drugs for poo=
r countries after concessions were promised the WTO meeting in Doha, Qatar,=
 in November 2001 as a way of getting the sceptical developing world on boa=
rd. The details were supposed to be hammered out in Geneva by the end of la=
st year, but the White House vetoed the proposed deal after heavy lob bying=
 from US drug companies.

Aid agencies said America's intransigence had forced the developing world t=
o accept a flawed agreement which imposed significant hurdles on countries =
hoping to import cheap drugs from abroad.

Under current trade rules any country can override patents in its home mark=
et and authorise production of the generic equivalent - as the US threatene=
d to do during the anthrax scare in 2001 to force down the price of treatme=
nt. But global trade rules prevent generic manufacturers from exporting to =
countries that do not have a domestic drug industry.

Under the deal, exporting countries would have to issue a compulsory licenc=
e overriding foreign patents, something the agencies fear they may be reluc=
tant to do.

Oxfam said last night that the draft agreement left the world's poorest sta=
tes dependent on other countries standing up to intense pressure from the U=
S pharmaceutical industry. "This deal has been watered down so much that it=
 isn't really anything to cheer about," said Oxfam's Michael Bailey.

Ellen t'Hoen of the volunteer doctors' organisation M=E9decins sans Fronti=
=E8res said the deal was disastrous. "It poses so many hurdles and hoops to=
 jump through that we are really worried it may not work at all," she said.

"By continually demanding more restrictions, the US seems to be pushing for=
 a watertight system so that no generic drugs ever get through to the patie=
nts in developing countries who desperately need them.

"[This] will, over time, lead to the complete drying up of availability of =
generic sources and will inevitably lead to increased drug prices."

The undertaking that the Doha get-out clause, allowing the overriding of pa=
tents, should not be used for commercial advantage meant that generics comp=
anies such as Cipla in India, which undercut the multinationals to offer Ai=
ds drugs for less than $300 (=A3190) a year and forced the big companies to=
 bring down their prices, would have no incentive to produce cheap copies.

"The drugs that we have access to now that are affordable are produced by c=
ommercial entities," Ms t'Hoen said. "We need more industrial activity and =
greater competition in the market. That is the mechanism which is being kil=
led."

She blamed pressure from the US for "a text that is blatantly ridiculous" b=
ut also the EU for failing to join the closed discussions. "After all the r=
hetoric of [Pascal] Lamy [its chief trade negotiator], he is completely abs=
ent from these talks," she said.

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