[Ip-health] Oxfam: Robbing the Poor to Pay the Rich? How the US Keeps Medicines from the World's Poorest

[Mike Palmedo]

Press release (see below)
http://www.oxfam.org/eng/policy_pape_medicines_US.htm

Full briefing paper
http://www.oxfam.org/eng/pdfs/pp031201_robbing_medicines_US.pdf

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December 1, 2003

Robbing the Poor to Pay the Rich?
How the United States keeps medicines from the world=92s poorest

Impressive advances in medicine and technology have boosted health and
extended life expectancy =96 but not for everyone. Vital new medicines for
diseases such as HIV/AIDS are priced out of reach of the millions of
sick people in the developing world, in part due to global patent rules
which restrict the availability of affordable generic versions of
patented medicines. In 2001, all members of the World Trade Organization
adopted the =91Doha Declaration=92, promising to prioritize public health
over private patent rights and to promote =91access to medicines for all=92=
.
This paper examines how the government of the United States is
contravening this commitment by using technical assistance, bilateral
and regional trade agreements, and the threat of trade sanctions to
ratchet up patent protection in developing countries. This policy
benefits the influential U.S. pharmaceutical industry while pushing
medicines further out of the reach of poor people.

Executive Summary

In 2001, WTO members unanimously adopted the =91Doha Declaration=92, which
affirmed the primacy of public health over international patent rules.
Trade ministers recognized that WTO patent rules =96 known as TRIPS =96 lea=
d
to higher drug prices, placing medicines out of reach of patients in
poor countries and undermining public health. They made a commitment to
interpret patent rules in a way that prioritized health standards, and
to ensure that countries too poor to buy branded drugs and unable to
make cheap generic substitutes could obtain medicines more easily.

The United States signed the Doha Declaration, promising to promote
=91access to medicines for all=92. But in the two years since Doha, it has
not only failed to uphold this commitment but has actively undermined
the letter and spirit of the Declaration. The U.S. Trade Representative
is pursuing standards of patent protection which go far beyond WTO
patent rules, and it is doing so regardless of the devastating impact
that this could have on the capacity of developing countries to treat
health problems such as Acquired Immune Deficiency Syndrome (AIDS).

Oxfam believes the U.S. government is pursuing this pro-patent agenda on
behalf of its powerful pharmaceutical lobby, PhRMA. The industry has an
interest in strong patent protections, which limit generic competition
and therefore protect its market share and profits. In 2000, the
industry contributed approximately $20,142,583 in campaign
contributions, 76 per cent of which went to the Republican Party. In
2003, the industry gave $29,371,406, with $21,719,527 of that money
going to Republicans. In addition, it spends approximately $120 million
each year on lobbying. This is a drop in the ocean compared with its
yearly sales: an estimated $400 billion in 2002. The ten largest U.S.
drug companies made $35.9 billion in profit in 2002, with a rate of
return for shareholders of 27.6 per cent, more than two and a half times
the Fortune 500 average of 10.2 per cent.

Fourteen million people die each year from infectious diseases, and more
than 42 million people are living with HIV/AIDS, including 3.2 million
children under the age of 15, the majority in developing countries. And
patients in developing countries now account for 59 per cent of the 56.5
million annual global deaths from non-communicable diseases such as
cardiovascular disease, cancers, diabetes, respiratory disease, obesity,
and others.

Much of this suffering and death could be prevented if people had
regular access to medicines, yet one-third of the world=92s population
does not. Many factors are responsible, including poverty, lack of
finance, and poor health-service infrastructure =96 but the high cost of
new patented medicines is also a key factor. The absence of cheap
generic versions of these medicines means that poor people must simply
go without the drugs that could save or prolong their lives. The most
notorious example is medicines to treat HIV/AIDS, but the problem will
extend to all new medicines whether for drug-resistant strains of
existing killers such as TB, malaria, and pneumonia, new improved
treatments for hepatitis, cancers, diabetes, or treatments for new
emerging diseases, such as Severe Acute Respiratory Syndrome (SARS) or
anthrax.

Poor countries with fewer resources to dedicate to healthcare and
medicines need access to the cheapest drugs available to fight such
problems of public health. But the cheapest generic versions of new
patented drugs are being blocked from developing-country markets by U.S.
trade policies on intellectual property, at the urging of the drug
companies that benefit from the monopoly position that patents confer.

During the two years since Doha, the U.S. has contravened the goal of
the Declaration =96 =91access to medicines for all=92 =96 by pressuring
developing countries to implement =91TRIPS-plus measures=92: patent laws
which go beyond TRIPS obligations and do not take advantage of its
public-health safeguards. The USA does this in a number of ways. It
provides biased technical assistance in countries such as Uganda and
Nigeria, which benefits its own industry by increasing drug prices and
limiting the availability of generics, but reducing access. It uses
bilateral and regional free trade agreements to ratchet up patent
protection in developing countries. It has recently concluded free trade
agreements with Chile and Singapore and is using the high intellectual
property standards in the latter as a model for negotiations on the FTAA
(Free Trade Area of the Americas (see OI briefing paper =91From Cancun to
Miami: the FTAA threat to development in the hemisphere=92, November 2003)
and with Central American, Southern African, and other countries. And
lastly, the U.S. bullies countries into increasing patent protection by
threatening them with trade sanctions under section 301 of the Trade Act
of 1974; nearly all those targeted are developing countries, including
countries in compliance with their WTO obligations. The Costa Rican
Pharmaceutical Industry estimates that the implementation of such
TRIPS-plus patent rules would mean an increase in the cost of medicines
of up to 800 per cent, because these rules would seriously restrict
competition from generics.

At the WTO, the U.S. pressured developing countries to accept an
unnecessarily restricted and complex deal which was intended to
safeguard access to generic drugs for countries that are too poor to buy
patented drugs and which lack domestic drug-production capacity. Action
on this issue was promised as part of the Doha Declaration, but
regrettably the U.S. and other rich countries rejected a simple solution
initially proposed by developing countries, the World Health
Organization (WHO) and NGOs. The U.S. has also pressured Cambodia (the
first of the least-developed countries [LDCs] to join the WTO since its
foundation) to agree to introduce patenting now, even though the Doha
Declaration permitted the LDCs to defer the introduction of
pharmaceutical patenting until at least 2016.

The pro-health interpretation of international patent rules was a key
promise made by rich countries in launching the current =91Doha Round=92 of
trade talks. This Round has been dubbed the =91Doha Development Round=92,
since it was meant to address the needs and interests of poorer
countries. But developing countries are now rightly skeptical, doubting
that their rich-country trading partners =96 especially the U.S. =96 ever
intended to focus on development. In the two years since Doha, the U.S.
has been excessively responsive to industry interests, while failing to
consider the importance of generic medicines for fighting public-health
problems in developing countries that lack healthcare resources. Unless
the U.S. adjusts its trade policies to reflect its commitment at Doha,
medicines will be priced further out of reach of poor patients. Millions
of people will suffer or die needlessly because the U.S. government
refuses to look beyond the short-term commercial interests of its drug
lobby.

Oxfam recommends the following measures:

- WTO members should ensure the simplification of the final TRIPS
amendment aimed at lifting restrictions on the export of affordable
generic versions of new drugs to countries without drug-production
capacity. Unnecessary red tape should be removed, and there should be no
mandatory limits on country eligibility, or on the diseases for which
such medicines can be procured, in keeping with the Doha Declaration.
WTO member states should amend their legislation accordingly.

- The U.S. should stop using the threat of trade sanctions to bully
countries into adopting =91TRIPS plus=92 intellectual property protections.
TRIPS-plus rules further limit the availability of affordable generics
in countries where they are urgently needed, and they contravene the
Doha Declaration.

- The U.S. should also stop using its bilateral trade agreements such as
CAFTA, regional agreements such as the FTAA, or negotiations over to WTO
accession to pressure developing and least-developed countries to adopt
TRIPS-plus patent rules.

- The U.S. should provide technical assistance to developing countries
that will benefit public health and access to affordable medicines,
rather than the interests of the pharmaceutical industry.

- Developing countries should resist pressures to implement TRIPS-plus
measures, and should make full use of the TRIPS flexibilities, including
but not limited to the recent WTO deal, in order to gain access to
medicines, in line with the Doha Declaration

- The international community must continue to monitor the health
impacts of the TRIPS Agreement, and should consider further future
reforms to the Agreement in order to give developing countries greater
freedom to decide the appropriate length and scope of patents protection
for medicines based on the needs of public health. More broadly,
evidence from authoritative sources indicates the need for a substantive
review of the entire TRIPS Agreement in the light of its detrimental
impact on innovation, access to knowledge-based goods, and development.