[Ip-health] Health Versus Wealth: The Thai Frontier

[Mike Palmedo]

http://www.opendemocracy.net/globalization-hiv/thailand_health_3744.jsp#

Wealth versus health =96 the Thai frontier

Roger Tatoud
Open Democracy
17 - 7 - 2006

Affordable drugs are crucial for fighting AIDS in developing countries,
but the United States puts their availability at risk through its harsh
trade agreements. Will Thailand stop the US in its tracks, and help
protect access to life-saving treatments for citizens worldwide?
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In the battle against AIDS, Thailand has good news: since 2001, the AIDS
death rate there has fallen by 79 percent, thanks to the supply of
low-priced locally produced generic drugs and the 30-Baht universal
health care scheme. But this success story is about to be challenged by
the United States-Thai Free Trade Agreement (FTA) currently under
negotiation, which includes restrictive intellectual property rights,
and will put at risk the survival of hundreds of thousands of Thai
people living with HIV, and beyond Thailand, the survival of millions
who will be affected by the Thai precedent.

The well being and lives of 600,000 Thais living with HIV (of whom
200,000 are women and 12,000 children) depend on readily available and
affordable antiretroviral therapies. Currently, only 80,000 people have
access to life-prolonging treatments, with a government target of
150,000 by 2008. If signed and implemented, the FTA would cover issues
including trade liberalisation, services and investment, and
intellectual property provisions, with dire, long-term consequences for
the affordability and availability of drugs, especially in the case of
HIV antiretroviral therapies.

Thailand and the US have now engaged in six rounds of negotiations. The
last round, held in January, ended in limbo because of rising political
opposition, unacceptable demands from the US and a Thai delegation not
prepared to meet its US counterpart of highly skilled experts and
negotiators. Following the dissolution of parliament by Thaksin
Shinawatra in February, Thailand's caretaker government is set to
continue informal talks, amid questions over its legitimacy to do so.

World trade and public health

The World Trade Organisation's patent rules, known as Trade-Related
Aspect of Intellectual Property Rights (Trips), recognise the right of
countries to protect public health. They were introduced "in an attempt
to narrow the gaps in the way [intellectual property] rights are
protected around the world, and to bring them under common international
rules". The 2001 Doha declaration allowed flexibility in the application
of Trips to ensure that medicines are available and affordable, and that
generic drugs can be produced and drugs imported at a lower cost than
brand versions.

The US Trade Act of 2002 instructs its negotiators to respect the Doha
declaration in all trade negotiations. Yet US negotiators consistently
ignore their obligations and violate their mandate by negotiating
Trips-plus provisions in FTAs. These provisions extend the life span of
patents on drugs from twenty to twenty-five years; require known
substances to be re-patented for any new use whilst restricting the use
of data previously acquired to patent these drugs; limit the use of
compulsory patenting by government as a tool to ensure access to low
cost medicine; and aim to turn the drug regulatory authorities into
patent enforcers for pharmaceutical companies. Extending the life span
of patents (through evergreening and "frivolous patenting") will delay
the production of generic products, as will measures that require the
repetition of clinical trials prior to patenting new applications of old
drugs. Restrictions on the licensing of drugs reaching the end of their
patent period will lead to delays in their marketing.

The production of generics is essential in the struggle with the
pharmaceutical industry to lower the cost of treatment. Brazil, which
adopted a hard-line attitude in fighting the HIV epidemic, was
successful in bringing the price of first line treatment from US $10,439
to US $152 between 2000 and 2004. However, AIDS is a chronic disease and
the challenge will become more prominent with second, third and fourth
generation antiretroviral therapies (ART), which are more expensive and
protected by recent patents. Since it will be necessary to move from one
line of treatment to another with the development of drug resistance,
the cost of treatment may rise from a current $470 per patient per year
to $7000. Fourth generation ART may bring the cost up to $30,000 per
patient per year in the absence of competition, generics or other
provisions ensuring drug availability for all within government budget.
(Brand-name versions of some first-line AIDS drugs in Thailand are
between 5.6 and 25.8 times higher than the prices of generic versions.)
Such costs put these medicines out of reach for a country like Thailand.

Medecins Sans Frontieres (MSF) warns countries negotiating trade
agreements with the United States against provisions that will
dramatically reduce their ability to provide low-cost quality medicines
for their citizens. Such restrictions will have long-term effects and
will not be limited to HIV/AIDS. OXFAM observes that "the case of
HIV/AIDS in Thailand illustrates how unnecessarily strict intellectual
property protection could block access to medicines. But the problem is
not limited to this disease. Thai people need other medicines to treat
diseases such as pneumonia, gonorrhoea, and cancer. The rising
incidences of resistant infections and of chronic disease also require
new, effective, and affordable medicines. Many of these medicines are,
and will be, under patent and therefore too expensive for those who need
them."

Methods and motives

Beyond the life-threatening limitations introduced by the Trips-plus
provisions, the methods and the motivations behind their introduction
are questionable too. In December 2005, during Thailand's National
Technical Consultation on FTAs and intellectual property, sponsored by
the United Nations Development Programme, Carlos Correa of the
University of Buenos Aires observed that the United States' strategy is
to leave the issue of intellectual property to the very last stage of
the negotiations, after other compromises have been reached. Only then
are the Trips-plus provisions put on the table, when it is too late to
re-negotiate the whole package. He also pointed out that some of the
Trips-plus provisions go beyond US patent legislation and that the
industry is using the FTAs to further tighten US legislation.
Nevertheless, similar agreements have been signed between the US and
other countries such as Vietnam, Lao PDR and Singapore.

During the negotiation of previous free trade agreements, no attempt was
made to hide the close ties between US trade representatives and the
pharmaceutical industry. A glance at the composition of the US-Thailand
Free Trade Agreement Business Coalition, which is "strongly committed to
promoting the negotiation, passage, and implementation of a meaningful
and comprehensive bilateral FTA between the United States and Thailand",
is worth many words.

The US shows a trend towards increasing the number of Trips-plus
provisions in trade agreements. The US-Vietnam FTA signed in 2000
included only a data exclusivity provision, while the 2004 US-Bahrain
FTA included in addition to this provision an extended patent period for
each new indication (even when registered abroad), an extended patent
term, and a "linkage" provision which prohibits the Drug Regulatory
Authority from registering a generic version of a medicine that is still
protected by a patent. Hence, for each new FTA signed, the United States
is adding further restrictions that contravene the spirit of the Doha
declaration and threaten further people's lives. MSF concludes that,
"the pharmaceutical industry in wealthy countries has refused to accept
the primacy of health over commercial interests ... Under pressure from
industry, wealthy countries, and the United States in particular, have
been using bilateral and regional trade agreements to negotiate
provisions which go beyond the WTO's TRIPS Agreement ("TRIPS-plus"),
which undermine the Doha Declaration and which restrict, if not
eliminate, the flexibilities and safeguards it reaffirmed."

In 2005, when asked if the US would agree to a deal that does not
include its proposed patent provisions, US spokesperson Neena Moorjani
replied that "we have not concluded any previous FTAs that did not
include these provisions. US FTAs maintain the same standards no matter
which country we are negotiating with". Standards built step-by-step on
previous free trade agreements, each creating a dangerous precedent for
the next.

Saying no

After the collapse of the last round of negotiations, American
businesses offered to "help" in lobbying the US Congress to allow talks
on the Thai-US free-trade agreement to move forward, with overt
intimidation that "the prolonged delay to the negotiations will
discourage world-class companies from opting [to invest in] Thailand".
Thailand still has several options when the next round of negotiation
opens. The Thai representatives should not let themselves be bullied by
the US negotiators and should push their agenda forward, as did
Colombia, Brazil and Malaysia. Most importantly Thai negotiators and the
government should make the matter public. One of the major obstacles in
addressing this issue has been the negotiating process's lack of
transparency and therefore the absence of public debate. The
participants in the National Technical Consultation made ten
recommendations to Thai negotiators, including building on existing
studies assessing the impact of Trips-plus provisions and drawing on the
technical expertise of relevant international organisations.

In this regard, Malaysia's experience is of particular interest: by
issuing compulsory licenses for the import of HIV medicine, the Ministry
of Health successfully reduced the cost of the monthly treatment from US
$261 to US $41. Likewise, changes in India's Patents Act allowed Indian
manufacturer Cipla to supply African developing countries with
inexpensive import of generic drugs that cannot be produced locally. But
the production of generics is not without challenges: the recent attempt
by Gilead Sciences to patent the key AIDS drug tenofovir, a previously
known compound, shows that the pharmaceutical industry is not giving up.

Remarkably, the role and awareness of these FTA in US civil society is
crucially lacking, judging by the poor coverage of these issues in
mainstream printed media in the US. If US citizens were informed of the
practice of the FTA negotiators and of the consequences of these
agreements, that go far beyond Thailand and have an impact back home,
Thai negotiators may have more leverage in the forthcoming negotiations
and be better equipped to resist an agreement that will seriously impact
people's access to medicine, prevent the scaling up of HIV/AIDS
programmes, undoubtedly increase disease-related death rates and create
a huge burden for the national health budget.

Ultimately, the Thais still have the option to give a polite "No" to the
US Free Trade Agreement, as Thailand has been TRIPS compliant for a long
time and investment will still come to this part of the world where the
future of business belongs, FTA or no FTA. This FTA will have a
significant impact on all future FTAs and it is worth watching closely
the next round of negotiations to ensure that access to life-saving
medicine remains a fundamental right for everybody all over the world.