[Ip-health] USA for Innovation letter to Congress

[Mike Palmedo]

http://www.usaforinnovation.org/news/050907_USAFI_Adelman%20Letter.pdf

Ambassador Kenneth L. Adelman,
Executive Director
USA For Innovation
P.O. Box 57052
Washington, DC 20037-7052

May 9, 2007

Members of Congress
United States of America

Dear Member of Congress:

I wish to bring to your immediate attention the recent attacks on
American intellectual property being perpetrated by Brazil and Thailand.
These attacks endanger the basis of American prosperity, innovation, and
jobs. Unless vigorous measures are taken soon, such attacks are likely
to spread to other countries, to the further detriment of U.S. national
interests.

Last Friday, Brazil=92s President Luiz Inacio Lula da Silva issued a
"compulsory license" to override the U.S. patent on an AIDS drug made by
Merck. Obviously, this measure undercuts future research and development
on medical innovation, upon which the health of millions around the
world depend.

The public rationale given by the governments of Thailand and Brazil to
override the property rights of foreign firms is invalid. Issuing a
compulsory license in this manner is considered by USA for Innovation to
be illegitimate under World Trade Organization rules, indisputably bad
policy, and dangerous precedent.

When Brazil and Thailand issue compulsory licenses, they signal to the
world their unwillingness to respect international patent protection. If
this grows into more of a trend =96 which it will, unless strongly
resisted -- innovators will no longer choose to provide life-saving
drugs and other medicines in these countries.

Moreover, such a move is short-sighted for the countries themselves. It
hurts local firms in Brazil and Thailand trying to attract foreign
investment. It hurts their patients, who will no longer have access to
patented medicines which, in many cases, are the only treatments proven
safe and effective.

Thailand and Brazil have no excuse for their behavior. They are not poor
countries, and cannot claim to be in crisis. Thailand=92s GDP ranks it
among the top 10% wealthiest countries in the world, and its government
spends little on health care. The World Health Organization notes that
Thailand spends far less on health care (3.3% of GDP) than peers such as
Argentina (8.9%) or poorer countries like Cambodia (10.9%) or Lebanon
(10.2%). The United States spends 15.2%.

What is true in Thailand is even truer of Brazil. It is not only in the
top 10% of richest countries in the world, but in the top 5%. While
Brazil spends a greater percentage of its GDP on health (7.6%) than
Thailand, it is still half of what America spends.

In attacking intellectual property rights of American and European
companies, Brazil and Thailand threaten innovation, which is the
lifeblood of our economy. In this age of globalization, U.S.
intellectual property is our comparative advantage.

A 2005 study by two leading economists =96 the Democratic,
Clinton-appointee Dr. Robert Shapiro and Republican advisor Dr. Kevin
Hassett -- estimates that U.S. intellectual property is worth between $5
trillion and $5.5 trillion. This equals approximately 45% of the U.S.
GDP, and is greater than the GDP of any other nation in the world.

Intellectual property accounts for about one-quarter of all business
investment over the last decade. Intangibles now account for nearly
two-thirds of the market value of large U.S. public companies.

As importantly, nearly 3 million American jobs depend on continued
investment in biopharmaceuticals. The world benefits from the
life-saving results produced by these American scientists, researchers,
doctors and teachers. More than 70% of all world medicines are created
by Americans. International refusal to pay for these products not only
threatens millions of American jobs, it endangers our ability to produce
the new medical treatments the ailing around the world need most
desperately.

Both Brazil and Thailand enjoy extraordinary benefits from Americans.
While American workers face expensive tariffs when exporting goods and
services to these countries (including, incredibly, taxes and tariffs on
medical products), both Brazil and Thailand receive generous treatment
when sending their products to the U.S. under the Generalized System of
Preferences.

Both countries also receive a host of military, humanitarian and other
forms of assistance from the U.S. government, in addition to private
donations from millions of American charities. It seems appropriate to
remind leaders of these countries that the United States will protect
innovation-producing American firms and jobs. Doing so now, in a
vigorous manner, will save lives in these countries and throughout the
world.

Sincerely yours,

Kenneth L. Adelman,
Executive Director
USA For Innovation




--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu