Doha Declaration Nearly Decided
The Fate Of Medicine Access In Poor Countries

by Sanjay Basu
ZNet | Global Economics

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Over 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 WTO).

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).

Anticipating that 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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Recommended Readings:

Farmer, P. (2003). Pathologies of Power: Health, Human Rights, and the New War on the Poor. Berkeley: University of California Press.

Kim, J-Y., Millen, J., Gershman, J. & Irwin, A. (2000). Dying for Growth: Global Inequality and the Health of the Poor. Boston: Common Courage Press.

Navarro, V. (2002). The Political Economy of Social Inequalities: Consequences For Health and Quality of Life. New York: Baywood. 

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References:

Bello, W., Poh, L., & Cunningham, S. (1998). A Siamese Tragedy: Development and Disintegration in Modern Thailand. London: Zed Books.

Bloomberg. (2003 August 27). WTO Draws Closer to Accord on Access to Cheap Drugs. Available online: http://quote.bloomberg.com/apps/news?pid=10000100&sid=apHyDAplKWHY&refer=germany

Boseley, S. & Carroll, R. (2002 October 4). Profiteers resell Africa's cheap drugs. Guardian UK.

Donnelly, J. (2003 January 31). None of them had to die. The Boston Globe.

Families USA. (2002). Profiting from Pain: Where Prescription Drugs Dollars Go. Available online: http://www.familiesusa.org/

Farmer, P. (2003). Pathologies of Power: Health, Human Rights, and the New War on the Poor. Berkeley: University of California Press.

Forbes. (2003 January 28). Pfizer's McKinnell says drug patent talks progress. Available online: http://www.forbes.com/business/newswire/2003/01/28/rtr860810.html

Gellman, B. (2000 December 27). An Unequal Calculus of Life and Death. The Washington Post. Available online: http://home.cwru.edu/activism/READ/WP122700.html

Kim, J-Y., Millen, J., Gershman, J. & Irwin, A. (2000). Dying for Growth: Global Inequality and the Health of the Poor. Boston: Common Courage Press.

Mayne, R. (2002). U.S. Bullying on Drug Patents: One Year after Doha. Oxfam Briefing Paper. Available online: http://www.oxfam.org/eng/pdfs/pp021112_bullying_patents.pdf

MSF. (2003). Reneging on Doha. Available online: www.accessmed-msf.org/documents/renegingondoha.pdf

Oxfam. (2003 August 27). WTO patent rules will still deny medicines to the poor.

Public Citizen. (2001). Rx R&D Myths: The Case Against the Drug Industry's R&D "Scare Card". Available online: http://www.citizen.org/publications/release.cfm?ID=7065

World Trade Organization. (2001). Declaration on the TRIPS agreement and public health. Available online: http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm

Zimmet, P. et al. (2001). Global and societal implications of the diabetes epidemic. Nature. 414(6865): p. 782-7.

August 28, 2003

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