[Ip-health] Letter to USTR from 11 Members of Congress on Data Protection Rules in DR-CAFTA

[Mike Palmedo]

http://www.cptech.org/ip/health/trade/cafta/congress01262005.pdf

January 26, 2005

The Honorable Robert B. Zoellick
United States Trade Representative
600 17th Street, NW
Washington, DC 20508

Dear Mr. Ambassador:

We are writing to follow up on letters sent to you on December 10, 2003
and September 30, 2004, opposing the inclusion of "test data" secrecy or
pharmaceutical market exclusivity provisions in the free trade agreement
with five Central American countries and the Dominican Republic
(DR-CAFTA). In addition. to other provisions that are problematic to us
in this Agreement, we believe that inclusion of test data secrecy/market
exclusivity provisions in the DR-CAFTA violates congressional direction
under Trade Promotion Authority and is inappropriate as a policy matter.

An overwhelming majority in the Guatemalan Congress recently voted to
repeal a law providing test data secrecy. The law had been in effect for
only 18 months, having been enacted primarily due to pressure from USTR.
The Pan-American Health Organization and UNICEF both publicly supported
repeal of that law. Recent news reports have indicated that USTR has
been pressuring Guatemala to reinstate this law. We request that you
immediately cease pressure on Guatemala to adopt test data
secrecy/market exclusivity and instead agree to remove this provision
(relevant portions of Article 15.10) from the DR-CAFTA.

Section 2101(b)(4)(C) of the Trade Promotion Authority Act of 2002
directs USTR to uphold the 2001 WTO Declaration on the TRIPS Agreement
and Public Health ("Doha Declaration") and additional protocols on its
implementation. The fundamental purpose of the Doha Declaration was to
ensure that trade rules on intellectual property do not interfere with
the ability of developing countries to take "measures to protect public
health ... and to promote access to medicines for all."

Inclusion of test data secrecy/market exclusivity provisions in an FTA
with small, relatively poor developing economies such as the DR-CAFTA
countries interferes directly with this central purpose of the Doha
Declaration. Under the test data secrecy/market exclusivity rules, the
DR-CAFTA countries are effectively required to prohibit for five years
generic competition to brand name drugs, even where patent protection
does not exist. Further, unlike patent protection, there is no clear
exception to the test data secrecy/market exclusivity rules =97 creating
uncertainty as to whether drugs produced under a compulsory license, but
subject to test data secrecy, may be granted marketing approval even in
public health emergencies. Accordingly, the test data secrecy/market
exclusivity rules will slow the introduction of generic drugs, decrease
competition, raise prices, and hinder access to life-saving medicines in
the DR-CAFTA countries.

While similar periods of test data secrecy/market exclusivity have
successfully been used to promote innovation and enhance the
availability of lower-cost drugs in the United States, these rules were
part of a carefully balanced compromise that included new measures to
facilitate the approval of generic drugs and accelerate competition in
the marketplace.

The situation is very different in the DR-CAFTA countries. These
countries already have access to a robust generic drugs market. Further,
because the countries' markets are so small, there is no significant
trade advantage to the United States and no significant impact on global
research and development expenditures if these countries provide test
data secrecy/market exclusivity. Instead, there is a potential for
serious harm to people in these countries who need access to affordable,
life-saving drugs. The prospect is especially dangerous for a country
like Guatemala, which has the largest number of people infected with
HIV/AIDS in Central America, and other highly indebted CAFTA countries
that cannot afford to divert their limited health care budgets to pay
higher costs for brand name drugs.

DR-CAFTA clearly erodes countries' protections under the Doha
Declaration. The side letter to the DR-CAFTA on public health measures
does not adequately address our concerns. During consideration of the
Morocco FTA, efforts were undertaken in the hearing and mark-up of the
implementing legislation to make clear that a similar side letter serves
as an exception to the intellectual property provisions in the FTA. USTR
should not continue to use side letters in FTAs with language that needs
to be resolved through such legislative history. The language in the FTA
itself must provide a clear and specific exception from the intellectual
property and investment obligations for actions taken to meet important
public health needs. Further, USTR's current effort to pressure
Guatemala to change its law belies USTR's assurances that the side
letter guarantees the right of the DR-CAFTA countries to address the
public health needs of their citizens.

We look forward to your addressing this critical issue.

Sincerely,

Hilda L. Solis
Member of Congress

Henry A. Waxman
Member of Congress

Charles B. Rangel
Member of Congress

Linda T. Sanchez
Member of Congress

Pete Stark
Member of Congress

Sherrod Brown
Member of Congress

Raul Grijalva
Member of Congress

Sander M. Levin
Member of Congress

Thomas H. Allen
Member of Congress

Xaxier Becerra
Member of Congress

Jim McDermott
Member of Congress