[Ip-health] Comments on Peru/Panama Access to Medicines Provisions

[robert weissman]

For More Information, contact:

Robert Weissman, Essential Action, 202-387-8030 (o); 202-360-1844
(cell), rob@essential.org
Asia Russell, Health GAP, 267-475-2645, asia@healthgap.org
Brook Baker, Health GAP, 617-373-3217, b.baker@neu.edu



Comment and Analysis on Revised Intellectual Property and Access to
Medicines Provisions in Peru and Panama Trade Agreements

Essential Action and Health GAP
July 2, 2007

The final Peru and Panama texts incorporate the terms of the earlier
"concept paper" negotiation between the House Ways and Means Committee
and the U.S. Trade Representative, for better and worse, with few
changes. Our statement on the conceptual deal is available here:

http://www.cptech.org/ip/health/trade/ngos05142007.html

It remains the case that the Peru/Panama trade deals will leave patients
worse off than they would be with no agreement. The agreements enhance
monopoly protections for medicines beyond those required under the World
Trade Organization's Agreement on Trade-Related Aspects of Intellectual
Property (TRIPS), and will worsen public health.

These revised trade agreements are less bad than the original versions,
in some notable ways. If the deals are adopted -- and we hope they are
not -- it will be important that Peru and Panama aggressively
incorporate in their implementing legislation (and subsequent revisions)
the flexibilities that have been added thanks to the negotiating efforts
of the Ways and Means Committee.

More generally, the revised trade deals now set a ceiling for the
TRIPS-plus measures that can be imposed on developing countries. No
country negotiating trade or investment agreements or frameworks, or
responding to unilateral demands from the United States, should ever
accept more than has been included in these deals, which have been
accepted by the pro-Pharma Bush administration.

However, as the Ways and Means Committee has insisted, the Peru/Panama
trade deal terms are not a template for future trade agreements. This is
what the committee was able to negotiate for an already finalized text.
Any future agreements should be expected to be more public health-friendly.

The days of the U.S. government trade bureaucracy reflexively carrying
water for Big Pharma are coming to an end. The revisions extracted by
the Ways and Means Committee are one sign. The strong opposition
evidenced by Members of Congress to USTR pressure on Thailand for its
lawful issuance of compulsory licenses is another.

Regarding specific revised terms:

1. The revised text preserves the obligation to provide 5 years of data
exclusivity (16.10.2), which is the top TRIPS-plus priority of Big
Pharma. Data exclusivity provides monopoly protections separate from
those provided by patents, or forces generic companies to undertake
unethical, redundant, time-consuming and relatively expensive clinical
tests. The monopoly protections afforded by data exclusivity can delay
generic competition in cases where a pharmaceutical product is not
patent protected, or where a compulsory license has been granted on a
patent. Because the compulsory license on a patent only covers the
patent right, a generic firm may be barred from entry by the data
exclusivity rules, which effectively prevent it from gaining marketing
approval.

Informally, USTR has agreed in the past that countries could override
data exclusivity protections at least in cases where a compulsory
license was issued. We had hoped that the final text would clearly state
that countries can override data protections with compulsory
licensing-like mechanisms, in cases where they have issued a compulsory
license on pharmaceutical patents, but also in other cases. The final
text does not provide this assurance, though it does include a
"notwithstanding" clause (16.10.2(e)) that permits countries to protect
public health in accordance with the Doha Declaration. If the agreement
is adopted, we will work hard to advance an interpretation that says
this must mean countries have the right to regularly override data
protections with compulsory licensing-like mechanisms, but we fear the
general and vague language of this provision will not give countries the
confidence to do so.

It is true that, where partner countries rely on registration approvals
in the United States in making their own registration decisions, the
data exclusivity language offers the opportunity to limit the term of
protection to just five years from the date of registration in the
United States. This is an improvement from the even more onerous
measures in CAFTA and other trade deals. There are some other technical
limitations on data exclusivity that will limit its scope.

There is an interesting feature in the data exclusivity language that
was not anticipated by the concept paper: Under 16.10.2(b), exclusivity
is mandated for a reasonable period. Then: "For this purpose, a
reasonable period shall normally mean five years from the data on which
the Party granted approval to the person that produced the data for
approval to market its product, taking account of the nature of the data
an the person's efforts and expenditures in producing them."

This suggests that:

a. Five years is the norm, but it can be deviated from.

b. A country may require disclosure of at least some information about
cost of producing the data as a condition of its routine grant of the 5
years of exclusivity. This is important, because Big Pharma routinely
wildly overstates the cost of clinical trials and drug development,
without providing any substantive evidence for its claims.

c. The reasonable period of exclusivity may be shortened on a
case-by-case basis, at least in light of actual expenditures for R&D (if
not, for this provision, on pure public health grounds). It is
conceivable, at least in some cases, that these provisions could be used
to justify substituting a cost-sharing approach for exclusivity. (Under
a cost-sharing approach, a generic firm must pay a fair share of the
costs of clinical trials, but is able to rely on those trials immediately.)

2. The revised text does eliminate mandatory pharmaceutical patent
extensions for delays in the grant of a patent or regulatory approval.
16.9.6(c). Mandatory extensions pose enormous access to medicines
problems. Because of the low patent review capacity in many developing
countries, there is a significant and growing backlog of patent
applications. Mandatory delays therefore threaten very prolonged periods
of patent monopolies.

3. The revised text does eliminate the requirement for "linkage" -- a
prohibition on the drug regulatory agencies granting regulatory approval
if a patent is claimed. The revised text language (16.11.3 and 16.11.4)
is imperfect, but does eliminate the requirement. One unfortunate
element is the requirement that alternative expedited patent enforcement
mechanisms be provided before a product is placed on the market.
Separately, from an implementation perspective, it is vital that
countries include in the expedited process an opportunity for generic
firms to challenge the validity of the underlying patents the brand-name
firm is seeking to enforce. It is also the case that the provisions in
16.11.4 could be adopted by countries that have previously entered into
TRIPS-plus agreements with the United States.

Linkage provisions turn drug regulatory agencies into patent enforcement
agencies, even though such a duty is outside of their expertise and
purpose. In the United States, which includes significant safeguards
(the elements of 16.11.4, plus a large market and robust generic
industry), linkage has nevertheless been subjected to considerable
abuse, as recognized repeatedly by the Federal Trade Commission.

4. The revised text does incorporate the side letter on public health
into the actual text. (16.13) Incorporation of the side letter is an
improvement, but the general terms cannot override the more specific
problematic provisions; and it is hard to put much stock in such terms,
since USTR has repeatedly demonstrated its willingness to disregard such
obligations in the past.

There are some positive changes to previous side letters.

The word "necessary" has been eliminated. The current text 16.13.1 reads
that the chapter should not prevent countries "from taking measures to
protect public health by promoting access to medicines for all =85" The
previous text said countries should not be prevented "from taking
measures *necessary* to protect public health by promoting access to
medicines for all =85" Since "necessary" is a very restrictive term in
international trade law, removing the term is an improvement.

Also, additional language from the Doha Declaration has been
incorporated: "Accordingly, while reiterating their commitment to this
Chapter, the Parties affirm that this Chapter can and should be
interpreted and implemented in a manner supportive of each Party=92s right
to protect public health and, in particular, to promote access to
medicines for all." This should help give this provision some greater
interpretive impact.