[Ip-health] Henry Waxman's 10 June 2003 statement on why Hatch/Waxman is not appropriate for FTA agreements

[James Love]

*  [The Hatch/Waxman] system works in this country because most people
in the U.S. have health insurance that pays for essential drugs and
because we have  a health care safety net to assure that the poorest in
our society are not left without medical care and treatment. But to
impose such a system on a country without a safety net, depriving
millions of people of  life-saving drugs, is irresponsible and even
unethical. In developing  countries, we must do everything in our power
to make affordable drugs for life-threatening diseases available now.

* Whether in Central America, Latin America, Morocco, or Southern
Africa, there is a long slate of USTR negotiations where the
Hatch-Waxman could have devastating results.

http://waysandmeans.house.gov/hearings.asp?formmode=printfriendly&id=1107

June 10, 2003, Statement for the Record, Waxman, Hon. Henry A., a

Representative in Congress from the State of California, statement

House Committee on Ways and Means

Statement of the Honorable Henry A. Waxman, a Representative in Congress
from the State of California

I appreciate the opportunity share with the Ways and Means Committee my
serious concerns about including Hatch-Waxman style patent protections
in international trade agreements.

Let me start by saying that I am very proud of the Drug Price
Competition and Patent Term Restoration Act of 1984 and what it has
accomplished. When Senator Hatch and I proposed this legislation, we
were addressing a serious health care problem in the United States. On
one hand, we needed to bring down prescription drug prices in this
country. Because federal law did not permit approval of generic
versions, competition was stifled in the pharmaceutical marketplace and
many Americans could not afford their medication. At the same time, we
had to be careful that our response would not discourage the
pharmaceutical companies from investing in research to develop new drugs
that would save a great many lives.

Hatch-Waxman was a very good, balanced, and tailored solution to that
dilemma. The law streamlined the approval of generic drugs, while
protecting patent rights and creating other incentives for
pharmaceutical manufacturers to remain innovative. The policy ushered in
a wave of competition and scientific advances that greatly lowered the
price that millions of Americans paid for a wide range of medicines,
while maintaining high levels of innovation in emerging new drugs.

Like most good legislation, the Hatch-Waxman compromise was carefully
designed for a specific situation, in a specific regulatory system. But
our success here does not mean it is appropriate for other countries.
That is why I am greatly alarmed by its inclusion in Free Trade
Agreements like Chile and Singapore, which are being touted as the
cookie cutter model of U.S. demands for future trade negotiations. Many
of our trading partners face vastly different challenges and
circumstances than we do here in the U.S.

As we are all painfully aware, devastating epidemics in the developing
world, including AIDS, TB, and malaria are killing millions of people
and crippling whole societies. Even in middle-income countries, leading
killers like heart disease, diabetes, cancer and other conditions are
going untreated because essential medications are unaffordable in these
countries, costing many times the average citizen's annual income. While
the pharmaceutical industry's approach is to cure this problem with a
dose of Hatch-Waxman, this would have the lethal effect of keeping drug
prices in these countries unaffordable for many years longer than is the
case now.

I think it goes without saying that the U.S. faced nothing like these
kinds of problems when Hatch-Waxman was enacted here. We did not face a
situation where only a tiny percentage of the population was receiving
the medicines that they needed to survive. We did not face a situation
where a very large percentage of the young people in our society had
already contracted diseases that would swiftly and almost certainly kill
them if they did not receive such medicines.

If we had, the solution would certainly not have looked like
Hatch-Waxman, which delays market entry of low-cost generic drugs for
years after a life-saving drug becomes available. That system works in
this country because most people in the U.S. have health insurance that
pays for essential drugs and because we have a health care safety net to
assure that the poorest in our society are not left without medical care
and treatment. But to impose such a system on a country without a safety
net, depriving millions of people of life-saving drugs, is irresponsible
and even unethical. In developing countries, we must do everything in
our power to make affordable drugs for life-threatening diseases
available now.

Let me make clear that I am not talking about increasing the available
of Viagra or drugs for hair-loss, I am talking about preserving the
flexibility that governments need to build and maintain a functioning
health system. It would be reckless to impose an Hatch-Waxman without
close examination of its impact on a case-by-case basis.

As you review these agreements, I hope you will keep in mind that
Hatch-Waxman is not a "one size fits all" prescription. I believe that
the USTR should be obligated to provide a comprehensive review of the
potential impact on the health system of any countries where it plans to
table Hatch-Waxman requirements. Whether in Central America, Latin
America, Morocco, or Southern Africa, there is a long slate of USTR
negotiations where the Hatch-Waxman could have devastating results.


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