Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts
Volume 3, Number 30 August 31 - September 6, 2003 Quezon City, Philippines
Declaration Nearly Decided
the course of the past two years, trade negotiators from around the world have
negotiated over patents and medicine access. At issue is the question of whether
the privileges of companies to hold temporary (now 20+ year) monopolies over the
sale of specific medicines, and thereby prevent price competition, is to outway
public health concerns that medicines are priced out of reach to the poor. Last
night (Thursday, 8/28), the WTO nearly determined that the former privilege
outweighed the latter right by allowing the U.S. Trade Representative to
overrule the "Doha Declaration on the TRIPS agreement and Public
Health" (where "TRIPS" refers to the Trade-Related Aspects of
Intellectual Property Rights agreement), which was passed by all member
countries of the WTO in November 2001 (WTO, 2001). The Declaration stated that
patent law "can and should be interpreted and implemented in a manner
supportive of WTO members' right to protect public health and, in particular, to
promote access to medicines for all."
That claim was lost
on U.S. Trade Representative Robert Zoellick last December when he became the
only trade minister in the world to have signed the Doha Declaration (as all WTO
members did) but later prevent its key component from being implemented. This
component would allow the poorest of countries--those without their own
manufacturing capacity--to access cheaper "generic" medicines. But the
USTR decided that such a provision could only be applied to a limit set of
infectious diseases; conveniently, this set of diseases was also the set for
which no medicines existed or for which the relevant medicines were off-patent
or distributed through non-profit networks, thus having no impact on
highly-priced, patented medicines (MSF, 2003). After opposition to this
strategy, the USTR then tried to limit the scope of countries, and produce
restrictive legal mechanisms such as requiring that any generic medicine
supplier be totally "non-commercial" and only supply the public sector
in extreme cases in a way that would prevent any competition for the US/European
industry (a vow for the poor to remain in poverty, in Brook Baker's words), and
that an exporting country pass legislation for an importing country's citizenry,
making any realistic generic drug exportation impossible.
That proposal was
nearly passed last night until country representatives from the Philippines led
a group of smaller countries to halt the deal after enormous pressure from
non-profit organizations. Earlier this year, one company--Pfizer--began to
officially negotiate with the WTO ministerial director after the December
negotiations broke down; the USTR had no qualms about stating openly in
interviews with the business press that his position was directly arbitrated
through the Pharmaceutical Research and Manufacturer's Association of America
(Forbes, 2003), even though WTO trade ministers are supposed to represent
country citizenry, not private entities (which technically have no rights in the
The industry, and
the USTR, still claims that generics would undermine their capacity to pay for
research and development--that is, the research and development that American
taxpayers actually foot most of the bill for (Public Citizen, 2001). An NIH
assessment in the 1990's concluded that 85% of the basic and clinical research
used to develop the top five selling drugs was taxpayer funded work. The
industry doesn't bother to release it's own tax information, which reveals that
Merck this year used 13% of its profits on marketing and only 5% on R&D,
Pfizer spent 35% on marketing and only 15% on R&D, and the industry overall
spent 27% on marketing and 11% on R&D according the Securities and Exchange
Commission (Families USA, 2002). That's not accounting for the fact that 52% of
new drugs on the market aren't even the result of R&D, but are "me
too" drugs that are simple reformulations of old products slapped with new
stickers (Public Citizen, 2001).
The industry still
claims that generics will undermine its business, even as it continues to be
ranked by Fortune Magazine as the world's most profitable industry for 11 years
in a row (having profits as a percentage of revenue nearly three times the rest
of the Fortune 500 industry; Public Citizen, 2001). When confronted with the
fact that Africa comprises only 1.3% of the industry's revenues (making its loss
equivalent to "about three days fluctuation in exchange rates,"
according to an industry analyst quoted in The Washington Post; Gellman, 2000),
the industry claims that generic drugs will get diverted to the North to
undermine its key markets, and cites GlaxoSmithKline's recent loss of AIDS drugs
sent to Africa as a case in point. But a look at the GSK case shows that Glaxo
failed to even track the shipments and only discovered after a year that its
packages to Africa had been shipped improperly, allowing them to be smuggled to
Europe. Some of the packages turned out to be misdirected from Glaxo's own
European warehouse rather than from Africa (Boseley & Carroll, 2002). Indian
generic manufacturers, meanwhile, have shipped medicines for over two decades
without a single case of "diversion".
The perversity of
these arguments seems more frustrating when we consider that 24,000 people die
each day from preventable and treatable diseases (Donnelly, 2003), and that the
very economic policies that have restricted medicine access are leading to the
spread of infectious and non-infectious disease by destroying agricultural
sectors in poor countries and leading to massive forced-migration-related
infectious disease outbreaks and unrestricted food importation deals associated
with the increase of diabetes and metabolic syndromes (Bello et al, 1998; Kim et
all, 2000; Farmer, 2003; Zimmet, 2001).
the issue (along with a set of stalled agricultural talks) might provoke
questions about the WTO's fundamental legitimacy at its upcoming WTO Ministerial
Conference in Cancun, the USTR convinced four other member states two days ago
that the implementation of the Doha Declaration should be so narrow as to
essentially prevent generic drugs from being used in most circumstances
(Bloomberg, 2003). The deal, completed with the help of neoliberal trade
ministers from South Africa (and highlighting the fact that between-country
hegemony connects with within-country inequality to hurt the poorest of
persons), calls for extreme circumstances to exist before generic drugs can be
accessed. An epidemic would have to be in full-swing before public health
officials could address it--and only then could some long and complex legal
procedures (most outside of the domain of skill and time limits for poor country
health ministers) be started to allow for medicine access.
The text of the
USTR's implementation--which was to be rubber-stamped at a WTO committee meeting
yesterday (Thursday, 8/28) but was delayed by an unexpected, last-minute
objection--is 7 pages long, even though the clause to which it refers is only 20
words. This should indicate the level of domestic litigation required before a
country can use generic medicines. In addition, no matter how desperate the
health need, a developing country without the capacity to produce a needed drug
(which is virtually all of the poor countries) will have to ask another
government to suspend the relevant patent and license a local company to produce
and export it (Oxfam, 2003). Few countries, if any, will be prepared to help
other countries in this way; it's hard to imagine, for example, the Indian
government passing legislation for poor Pakistanis, let alone poor Indians. Such
an action would also provoke retaliation by the USTR, which in the past has
threatened trade sanctions on Thailand, Brazil, Argentina, and a number of other
countries for attempting generic importation for their own populations (Mayne,
2002). If that wasn't enough, the USTR is now also circumventing the entire WTO
agenda in order to propose bilateral agreements with countries that further
restrict medicine access while worsening terms of trade; these amount to
legitimized bribery for the wealthiest members of poor countries while hurting
the poorest (for a current list and implications for medicine access, see Table
2 in: www.zmag.org/content/GlobalEconomics/basu_publichealth.cfm)
While developing countries do have some remaining options for generic medicine access, such as using the full extent of existing deadlines before the implementation of the WTO's patent rules, and by building up their own manufacturing capacity (although this takes years of effort), the bullying of the USTR foreshadows the upcoming WTO Ministerial Conference in September. It also highlights some important themes to keep in mind: the making of dramatic declarations followed by closed-door negotiations that undermine unanimous agreements; the co-optation of small regional powers like South Africa to decide the fate of smaller and weaker nation-states through what Peter Drahos has termed "circles of consensus"; and the connection between First and Third World inequality and within-country inequality, which perpetuates the lack of representation and power made evident in this case. But the last-minute opposition from the Philippines and its allies also demonstrates that public pressure, in particular the campaign for access to medicines, continues to make a difference. Creative solutions will now be needed to challenge structural problems that have led to this scenario in the first place; among them are the development of new non-market-based drug development initiatives (www.accessmed-msf.org/dndi.asp), or the campaign to change university policies transferring publicly-funded research directly to for-profit entities without access stipulations (www.essentialmedicines.org). More support will be needed to enhance such strategies while delegitimizing others--such as the WTO arbitration structure--that these alternative models contend with.
Written by Sanjay Basu, Yale University School of Medicine: http://omega.med.yale.edu/~sb493/
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