[Ip-health] Inside US Trade: CONSENSUS ON TRIPS UNRAVELS AS U.S. BLOCKS DEAL ON SCOPE OF DISEASES

[James Love]

Apparently Paul Precht from Inside US Trade did not find it  useful to quot=
e
even one public health expert on the wacky proposals to limit the scope of
diseases.  And given the attention to official sources, one would have
expected to see the WHO statement on this quoted.   Jamie


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Inside US Trade
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CONSENSUS ON TRIPS UNRAVELS AS U.S. BLOCKS DEAL ON SCOPE OF DISEASES
_______________________________________________

Date: January 3, 2003

The failure of World Trade Organization members to reach a deal meant to
give developing countries better access to generic copies of patented drugs
has led developing countries and health activists to warn that resumption
of the talks this year will not be based on the most recent draft and will
open the entire issue to renegotiation. These critics are also likely to
wage a public relations battle against U.S. efforts to exclude medicines
for diseases like cancer from a solution.

In addition, African countries warned that efforts by the U.S. to limit a
potential deal on access to cheaper drugs by specifying the scope of
diseases it could cover could jeopardize the balance of the overall Doha
negotiations. The U.S. tried to limit the scope of the deal with a footnote=
.

At the Dec. 20 General Council meeting, the African Group represented by
Kenya said the footnote =93would have the effect of redefining and limiting
the scope of public health problems as reflected in paragraph one of the
Doha declaration=94 on TRIPS and public health.

=93For all of us concerned with the issues of public health, the Doha
declaration was and remains a significant mile stone and attempts to roll
back the commitments made in the interest of public health by all our
ministers at Doha are of great concern,=94 the African Group statement said=
.
=93Any attempt to redefine this declaration will unravel the delicate balan=
ce
achieved on many issues at Doha. We urge all members to join the consensus
in the spirit of multilateralism and humanitarianism.=94

The negotiations on easing countries' ability to override patents and
manufacture generic equivalents abroad ground to a halt on Dec. 20 over the
U.S. rejection of a pending draft text. In a Dec. 20 late-night session,
the General Council agreed to keep negotiating on the issue in advance of
its scheduled Feb. 10 meeting, but did not set another firm deadline.

After the breakdown in talks, the U.S. announced a unilateral moratorium on
bringing WTO dispute cases against countries that export drugs under
compulsory licenses, provided those drugs are used to treat a limited set
of grave infectious epidemics and the importing countries do not qualify as
high income.

These limits mimic the constraints that the U.S. failed to get other
countries to agree to in the WTO negotiations on TRIPS and health. The U.S.
refused to move from its position that a deal had to have a limited scope
of diseases, prompting developing countries to blame it for the WTO's
failure to meet a year-end deadline on this high-profile issue.

Within days Switzerland joined the U.S. in announcing its own moratorium,
which it said would cover drugs used to fight epidemics. The moratoriums
would stay in effect until a WTO deal is reached, both countries said.

The moratorium has no immediate practical effect, since developing
countries like India are not constrained by WTO drug patent rules until
2005, and can thus already export generic drugs under compulsory license to
other countries. Developing countries have already rejected a dispute
settlement moratorium as a permanent solution.

In the last-minute negotiations conducted with the direct involvement of
WTO Director General Supachai Panitchpakdi, the U.S. insisted on a list of
specific diseases that should be covered. But the U.S. also offered to
expand that coverage to twenty-three diseases in an effort to avoid a
breakdown of the negotiations. The final negotiations were conducted
primarily in small green room meetings brokered by Supachai.

But developing countries rejected the idea of any list in favor of more
general wording on the scope of the deal, as had been proposed by the
official in charge of the negotiations. Developing countries argued against
specific limits on diseases by pointing out that there is no mandate in the
Doha Declaration on TRIPS and Health for setting them.

In the end, the U.S. was alone in rejecting the draft text by the Chairman
of the Council on Trade Related Aspects of Intellectual Property Rights,
Eduardo Perez Motta.

Earlier in the week, WTO countries accepted, albeit with reservations, an
agreement drafted on Dec. 16 by Motta that would have set new rules for how
countries could source the manufacture abroad of generic copies of patented
drugs. But the Dec. 16 text also prompted criticism from all sides,
including the pharmaceutical industry, health activists, developing and
developed countries (Inside U.S. Trade, Dec. 20, p. 22).

The deal is a priority for developing countries that face public health
problems and want more flexibility under the TRIPS agreement to gain access
to cheaper medicines. The failure to reach a TRIPS and health deal by the
Dec. 31 deadline came at the same time the WTO failed to reach agreement on
strengthening special and differential treatment provisions under existing
trade agreements (see related story).

These failures mark another setback for progress in the Doha Round, which
faces important deadlines on agriculture, industrial market access and
services this spring, all being priorities for industrialized countries.
Some of these issues will likely come to a head at the September WTO
ministerial in Cancun, which is meant to serve as a mid-term review of the
negotiations.

On the last day of WTO negotiations, a TRIPs Council meeting was postponed
three times. Initially, the TRIPS council was to meet in the morning, which
was postponed until the afternoon and finally the evening. When the Council
met at 8 pm Geneva time on Dec. 20, the U.S. asked for a delay until 11
p.m. to consult with Washington.

The U.S. then returned to a green room meeting with a proposal that
developing countries had already rejected. It was a footnote to the
agreement enumerating 23 diseases that it would cover, one trade official
said.

One version of the footnote, obtained by Inside U.S. Trade, reads: =93This
decision applies to public health problems arising from yellow fever,
plague, cholera, meningococcal disease, African trypansimiasis, dengue,
influenza, HIV/AIDs, leishmaniasis, TB, malaria, hepatitis, leptospirosis,
pertussis, poliomyelitis, schistosomiasis, typhoid fever, typhus, measles,
shigellosis, hemorrhagic fevers, and arboviruses and other epidemics of
comparable gravity and scale including those that might arise in the future
due to natural occurrence, accidental release or deliberate use.=94

The U.S. developed this list by working with the Dept. of Health and Human
Services and the World Health Organization to identify the =93infectious
epidemics of most concern to health professionals in the developing world,=
=94
according to a USTR spokesman. Some of these diseases currently have cures,
while others, like Ebola, do not, the spokesman said.

Until Dec. 20, the U.S. had held out for an agreement that limited the
scope of diseases to AIDS/HIV, malaria, TB and other infectious epidemics
of similar gravity and scale. These limits had been demanded by U.S. drug
companies.

The wording for the footnote is potentially open ended, because it allows
the scope to cover additional diseases of similar gravity as those listed,
a U.S. private-sector source said. This could include any disease as bad as
measles or the flu, he said. He pointed out that the footnote also refers
to public health problems arising from these types of diseases, which could
cover secondary effects, such as depression.

By expanding coverage to a number of now incurable diseases affecting
primarily African countries, the list =93takes out incentives a company mig=
ht
have to come up with a cure,=94 the source said. =93The logic is perverse.=
=94

But the USTR spokesman said as long as the viability of the research-based
pharmaceutical industry is protected by a deal, these companies will have
the =93flexibility to develop treatments, even if there is no financial
incentive.=94 However, if compulsory licenses become the norm for all
diseases, that flexibility will be lost, the spokesman said.

As an alternative to the footnote, the European Union proposed that the
U.S. make a statement to the effect of the proposed footnote, after which
the General Council Chairman would make a statement saying that the new
rules would be implemented within the framework outlined by the U.S.
statement. Developing countries also rejected this idea.

It is uncertain what legal effect such a statement by the chairman would
have had, but the U.S. has argued in unrelated dispute settlement
proceedings that a chairman's statement is not binding on WTO members since
it is not part of an agreement.