NGO Letter to USTR Urging a Focus on R&D to Replace Emphasis on IP

Honorable Robert Zoellick:
We are writing to ask that the United States government change trade policies that relate to medicines. Measures which are primarily designed to raise drug prices should be replaced with measures that are more directly associated with increasing investment in medical research and development
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July 22, 2004

The Honorable Robert B. Zoellick
United States Trade Representative
600 17th St., N.W.
Washington D.C., 20508

Honorable Robert Zoellick:

We are writing to ask that the United States government change trade policies that relate to medicines. Measures which are primarily designed to raise drug prices should be replaced with measures that are more directly associated with increasing investment in medical research and development. In a series of bilateral and regional trade agreements, the USTR has sought to raise levels of protection for intellectual property. For patents, this has involved limitations on compulsory licensing, extension of terms, broader patent scope and lower novelty standards, and linkage between patent status and drug registration. The USTR has also sought by trade agreements global acceptance of strict exclusive rights in health registration data. The USTR often asks developing countries to accept rules that exceed US requirements. In the area of drug prices, the US government has entered into bilateral agreements that set floors on the prices of drugs (Korea), weaken price control mechanisms (Thailand), or which give the US government oversight of foreign reimbursement policies (Korea, Australia). The cumulative impact of these and future agreements will be to weaken the ability of any country, including the United States, to protect consumer interests. The higher drug prices that the US government is seeking will ultimately reduce access to the best new medicines.There is a better way.

We acknowledge that the development of new medicines is costly, and that there are legitimate trade issues associated with who should pay for R&D. We also note and share the concern of many members of Congress that the US should not be expected to shoulder the burden of financing new drug development alone. We also note and share the view of many experts that the current global system for financing new drugs is highly inefficient, focusing too much on non-innovative “me too” products that treat chronic illnesses afflicting high income persons, and too little investment in innovative medicines, vaccines and treatments for diseases that primarily afflict the poor, or public goods, such as the Human Genome Project. We also note the frustration of many development groups that there is little or no mechanisms to implement the technology transfer objectives in the WTO TRIPS agreement. We therefore urge you to advocate that the Bush Administration change its trade policy in the following way. We ask that the problems regarding medical R&D be addressed by agreements that enhance global R&D efforts. We will refer to this as the R&D+ approach, which we prefer over the TRIPS+ approach as embodied in the trade agreements your office has been negotiating. Such agreements should seek higher levels of R&D funding, greater transparency of R&D investment flows, more attention to investment in areas of health care priorities, the global support for the creation of public goods, and measures to promote technology transfer.

There are useful precedents upon which you can build. We note the April 14, 2003, joint statement by the heads of state in the US, France, Germany, Japan, China, and the UK on the Human Genome Project, and the recent US announcement at the G8 meeting in Georgia on the new global initiative to accelerate the development of a vaccine for HIV, as examples of positive and widely acclaimed global collaborative measures to promote global public health objectives. With respect to the new bilateral trade agreements, we ask that you abandon TRIPS+ measures, which will have the unintended consequence of reducing the flexibility of any country to protect consumers, and propose instead specific mechanisms by which our trading partners will increase investments in R&D, with particular emphasis on investment in projects that have the greatest public health benefits.

To this end, we ask for a meeting to discuss the possible R&D+ approaches that might be used in the next round of bilateral trade agreements. Joy Spencer will contact your office to schedule a meeting.

Sincerely,

James Love, Consumer Project on Technology (CPTech)

Rhoda Karpatkin, Consumers Union (CU)

Mark Silbergeld, Consumer Federation of America (CFA)

Spring Gombe, Health Action International (HAI)

Rob Weissman, Essential Action

Ken McEldowney, Consumer Action

Cc: Ralph Ives
Assistant US Trade Representative (USTR)

Anthony Fauci
Director
National Institute of Allergy and Infectious Diseases (NIAID; NIH)

Mark McCellan
Administrator
Centers for Medicare and Medicaid Services (CMS; DHHS)