[Ip-health] WSJ: Campaign Funds Help Steer U.S. Stance on Drug Patents, After Aiding Republicans, Drug Companies Prevail on Limiting Drugs to Poor Nations

[James Love]

Campaign Funds Help Steer
U.S. Stance on Drug Patents
After Aiding Republicans, Drug Companies
Prevail on Limiting Drugs to Poor Nations
February 6, 2003

By TOM HAMBURGER
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON -- Pharmaceutical companies shelled out more than $50 million
to help Republicans win control of Congress last November. Days after
the election, when international trade talks threatened their profitable
drug patents, the companies sought help from Republicans.

And they got it. More than two dozen Republican lawmakers signed letters
opposing efforts to dilute the industry's international patent rights in
order to make less costly drugs available to patients in poor countries.
Sen. Bill Frist of Tennessee, a top election strategist who since has
become Senate majority leader, phoned U.S. Trade Representative Robert
Zoellick with the same message. Top White House aides phoned Mr.
Zoellick's office to express concern as well.

On Dec. 20, the industry celebrated a victory when the U.S., alone among
the 144-member World Trade Organization, blocked a proposal for
distributing patented medicines to less-developed nations. Foreign
diplomats and international relief workers say lobbyists' pressure led
Mr. Zoellick to backtrack on an earlier U.S. commitment. U.S. trade
officials deny that, insisting the administration merely prevented the
WTO from expanding the scope of that commitment.

Powerful Friends

But the episode makes one fact of American political life undeniably
clear: After spending millions of dollars on campaign help in recent
years, the pharmaceutical industry has accumulated powerful friends it
can turn to in a pinch.

Drug-company lobbyists began feeling squeezed in mid-November by
unfavorable developments in follow-on negotiations to a 2001 agreement
signed by WTO members in Doha , Qatar. The Doha agreement declared that
poor countries could override patent protections and permit use of less
costly generic copies of drugs to tackle acute health problems.

The agreement, however, contained ambiguities. It didn't spell out rules
for the export of generic drugs to needy countries that couldn't
manufacture them on their own. And it didn't specify precisely which
diseases would be covered by the deal.

The Bush administration had believed the patent exception would apply
only to epidemics such as AIDS, tuberculosis and malaria, according to a
senior trade official. Representatives from other countries pressed the
broader view that any "public-health problem" might justify overriding
patents. A meeting was scheduled for December in Geneva to resolve the
differences.

Specific Language

So the drug companies turned to their allies in Washington to help
squelch the broader interpretation, which they said would set a
dangerous precedent and erode the value of their patents world-wide.
Their lobbyists asked lawmakers to contact Mr. Zoellick's office, even
suggesting specific language delineating the diseases and countries that
would be affected.

"It should be clear that only truly disadvantaged countries, such as
those in sub-Saharan Africa, be the beneficiaries of changed rules," the
letter suggested.

As it happened, those were precisely the words that appeared in
individual and group letters that 34 lawmakers signed and sent to Mr.
Zoellick. One signatory was Republican Rep. Nancy Johnson of
Connecticut, who survived a pivotal House race last November with help
from more than $204,817 of drug-industry spending, according to the
Center for Responsive Politics.

Another senior Republican lending a hand was Senate Judiciary Committee
Chairman Orrin Hatch of Utah, who received $387,824 for his re-election
campaign in the year 2000. So did Senate Finance Committee Chairman
Charles Grassley of Iowa, who received nearly $100,000 of
pharmaceutical-industry donations in 2000.

Democratic Allies

To be sure, some prominent Democrats sprang to the industry's aid as
well. Outgoing Senate Finance Committee Chairman Max Baucus of Montana,
who received $124,372 of industry-related contributions in his
successful 2002 re-election bid, endorsed the industry's interpretation
of Doha . Five members of the Congressional Black Caucus signed letters
containing the language suggested by the industry.

Yet the industry has provided roughly three-fourths of its largess in
recent campaigns to Republicans, who now control both Congress and the
White House. Alan Holmer, a trade-office veteran from the Reagan
administration who now heads the Pharmaceutical Research and
Manufacturers of America, wrote a letter to Mr. Zoellick that he signed
along with 19 drug company chief executives. As the Geneva meeting
approached, Trade officials also heard from top White House aides about
the issue.

"As is always the case, when there is an administration official
negotiating on behalf of the U.S., the White House and other agencies
keep in very close contact with the negotiator," said White House
spokeswoman Claire Buchan.

To the delight of drug companies -- and the chagrin of some other WTO
members -- the position Mr. Zoellick eventually took backed the
industry's interpretation of the Doha accord. A pact that was supposed
to serve "a small needy category," Mr. Zoellick explained during a trade
forum in South Africa last month, had been in danger of being twisted to
embrace more-affluent countries and less-ominous ailments, such as
obesity and sexual dysfunction.

"If you undermine the intellectual-property rights system," Mr. Zoellick
added, "you aren't going to have people developing these drugs."

Enforcement Moratorium

Mr. Zoellick, whose boss in the White House espouses a "compassionate
conservative" approach to governing, moved to counter international
critics by announcing a temporary moratorium on enforcing drug patents
for poor nations facing epidemics. Separately, the president himself
announced a $10 billion initiative to combat AIDS world-wide in his
State of the Union Address last month.

But critics insist the patent-enforcement moratorium is a smoke screen
for the administration's failure to agree to a long-term solution on the
issue. "The U.S. is backtracking," says Faizel Ismail, who heads the
South African delegation to the WTO. Nor has the AIDS funding quelled
criticism of Mr. Zoellick by international health activists. "Doha was
not just about AIDS, but about access for the poor to a range of
life-saving medicines in the future," says James Love, who monitors WTO
talks for the Consumer Project on Technology.

"The U.S. had agreed to find a solution to the problem the poorest
countries have accessing affordable medicines," adds Jennifer Brant,
trade-policy adviser for the international antipoverty organization
Oxfam. "Now, at the behest of powerful lobbyists, the U.S. has become
the obstructionist."

Write to Tom Hamburger at tom.hamburger@wsj.com


SIDEBAR:

CHANGE OF HEART

How the U.S. became wary of the Doha agreement:

November 2001: U.S. Trade Representative Robert Zoellick signs Doha
agreement allowing countries to override drug patents to address health
crises, such as AIDS and tuberculosis.

Summer 2002: In discussions over final language for the agreement, Mr.
Zoellick learns many countries want to use Doha provisions to treat
non-epidemics, "maybe even to provide Viagra" at low cost.

November: Nervous about the broader interpretation, U.S. drug companies
begin lobbying the White House and Congress to oppose Doha if it isn't
limited to specific epidemics.

Late November-early December: Top White House aides and Sen. Bill Frist
call Mr. Zoellick, urging him to protect patents in a narrowly targeted
Doha deal. Mr. Zoellick receives letters from two dozen drug-company
CEOs and 36 members of Congress.

Dec. 20: Mr. Zoellick becomes the only representative among 144 WTO
nations to oppose the final Doha agreement. Instead, he proposes a
temporary moratorium on patent enforcement for countries facing certain
epidemics.

--
James Love, Director, Consumer Project on Technlogy
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040