Notes on PhRMA’s Billy Tauzin on Thailand CLs and Other Issues

by Marcia Carroll
Multinational Monitor

Marcia Carroll of Multinational Monitor yesterday joined PhRMA’s Billy Tauzin’s teleconference following his meeting with the Thai Minister of Health. Tauzin’s remarks were interesting, and worth reviewing.

The notes that follow below are not verbatim, but they are pretty close.
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Comments of Billy Tauzin, President and CEOof PhRMA
Teleconference, May 22, 2007

We had a dialogue with the minister of public health of Thailand. It was a very frank and I think helpful discussion of the concerns that we have about the use of compulsory licenses in Thailand, under the trips agreement.
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We hope to encourage more consultation and negotiation and less of this sort of confrontational resolution through the use of CLs, and more through negotiated agreements.

We impressed upon the Minister our deep concern that the use of compulsory licensing sends a very negative signal concerning the investment of research dollars into critical medicines regarding diseases that all of us share and are combating — it is not helpful for research and development (R&D) of those critical products.

Concern that middle tier countries — Thailand is the 21st richest country according to the World Bank — exercising CLs has the effect of shifting the burden of R&D to patients in this country. Patients in this country should not be required to bear an unfair burden. Countries should share the burden to extent of their means.

CL is a sort of admission of failure of negotiation and consultation; it should be rare, not the rule.

We received some assurance of this.

They expressed frankly the need for negotiations to be timely and to respect concerns of poverty of some citizens; we acknowledged this, but expressed deep reservations about CLs without every compromise and negotiation.

Thais assured us they are anxious and willing to continue negotiations with PhRMA companies.

We tried to draw a distinction between middle tier countries to help us support R&D [and LDCs]; they should share the burden; rather than leave it to Am citizens to carry burden alone.

Very dangerous consequences for R&D for critical medicines for critical diseases [if compulsory licenses become routine].

Our concerns are their concerns.

Q: What if Thailand proceeds with other CLs on non-AIDS products? Would you urge the US government to file a case at the WTO?

Tauzin: The US governmentt has obligation under Section 301 to report on intellectual property (IP) protection.

Thailand can’t violate patents and then protest that it shouldn’t be cited for not protecting IP.

We got assurance from the ambassador that have a duty to respect patent rights.

We’ve urged the US government to express in strongest terms [concern]; and if there is no change, they would have to consider options, including removal of preferential trade treatments in terms of future trade relations.

If other countries follow their example across the span of disease categories, then the whole IP system would crumble, and support for R&D.

Q: Why is Thailand so important?

Tauzin: It is not just what Thailand is doing. Brazil has sort of emulated Thailand.

We’ve heard in the press that other countries are being urged to do so also.

There could be “a spreading epidemic of disrespect for IP rights.”

Thailand is a small share of the [global] market, but any dimunition of IP in the area sends huge, important signals, to investors and companies about their future plans.

Q: What do you know or learn about Thai CLs on cancer drugs; and, what’s your assessment of how WHO DG Margaret Chan is handling this question?

Tauzin: I have no info on cancer drug CLs.

Regarding Margaret Chan, our impression of her understandings of this issue and complexities of it — is that she has a very firm grip on the issue.

We also understand how difficult it is.

Bottom line is that these are complex issues that will require a great deal more discussion.

Margaret Chan is entirely capable and competent in this area, and we trust we will be able to work with her and WHO moving forward.

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Q: Related to Thai-company negoiations.

Tauzin: Under Am antitrust law, we can’t be associated with individual companies’ discussions. Sole discretion.

PhRMA companies have a long track record of philanthropic work around world — free clinics, a great deal of direct assistance — as they do to the poor in this country.

Q: The Thai health minister is reported to have said there will be noCLs if lower cost products are available from PhRMA companies.

Tauzin: I can’t discuss actual costs; we did broadly talk about our concern that developing countries like Thai have some responsibility to fund the global efforts at R&D; the problem of how mechanically continue to assist poor in world and have countries that can afford it — to support R&D [is something we will keep grappling with].

We literally acknowledged that we’ve seen mixed reports on those issues — all we know is that “a CL is an admission of failure.”

These drugs are expensive to Americans. Americans are not going to put up with [high prices in the US and lowered prices elsewhere] forever.

How do we who are blessed with better resources collectively share the burden, and at the same time continue to sponsor and fund the enormous cost of R&D?

I told the Thai health minister that I wouldn’t be alive today but for very expensive medicines developed here in America. There are folks in this world who don’t have access [to such medicines, and should].

Have to work out some balance world. … Those of us in devleoped and devleloping world who can collectively shoulder that burden and do so.

Q: How did the minister respond to the notion that mid tier countries should bear some of the R&D burden?

Tauzin: He and the delegation stressed the Thai concern — their poor, their budget problems; as you know, they’ve dramatically increased military spending.

We stressed the need for balance.

There are conflicting numbers on whether the government is expanding coverage in Thailand.

Q: What is your reaction to the Thai Minister being named chair of UNAIDS; and do you expect to see more expressions of concern from the Congress, as with the Lieberman letter?

Tauzin: The appointment was one of the reasons that we raised the concern that Thailand’s example not be emulated around the world.

This is gong to be controversial for a long time. Whenever trying to find balance in policy; deal with burden of cost sharing and extraordinary concern about access to medicines [then issues are difficult].

Look at the PDUFA bill; you will see a strong sense of the senate, expressing real concern about abuses of CL and IP and the need for respect for R&D.

This is not going to be easily resolved. Balance is never easily achieved

A CL is not balance; it is a failure of balance. Negotiations and respect for IP; mutual sharing of responsibilty for cost of medicines that save lives is where need be.

Q: As you know, USA for Innovation has been running a series of advertisements in the US and Thai press about the Thai decision to issue a compulsory license. First, do you agree with the thrust of the USA for Innovation ads. And second, do you know who has been funding USA for Innovation — so far as you know, has Phrma or any Phrma member company, or any of their affiliates, funded the group?

Tauzin: Those are not our ads, we’re not behind them; I don’t know who is funding them.

I can’t comment on it; I wish I could.

I don’t know; if I did, I would tell you.

Q: Response to Bill Clinton’s comments, contrasted with Al Gore supporting PhRMA.

[More response to previous question: If the ads agree with our position, so be it.]

I wrote President Clinton a letter a week ago, urging him to a sit down; I met with him at the White House when he and President Bush 41 were there for Katrina relief and Clinton suggested we talk together regarding what we could do with his foundation.

I saw his last statement on Thailand as an opportunity to open that dialogue.

Our concern with his announcement was that it seemed to encourage more of what is happening in Thailand, and that is of deep concern to us.

I was pleased that Al gore has expressed concern about protection of IP; he has been an advocate for a long time. He and I worked in the House and Senate to advance satellite television — we had to override President Clinton’s veto. I know of his deep concerns for protecting innovation and invention, for which this country is so famous.

Welcome his help in resolving.

Q: Would you support prize funds or methods of funding that are alternative to the existing patent-based system?

Tauzin; No.

We believe they would be very counterproductive to investment in R&D.

There are other good ideas [about how to support innovation], but IP protection has to be at the center of it.

Even countries with strong dictatorial governments, there’s a recognition that free enterprise works best for their citizens.

If you begin dismantling the whole basis upon which people invest in R&D and if you break that system down, you will see fewer companies and people investing in R&D.

You should expect patients to get hurt.

The Shadowy Drug Lobby That Has Thailand in Its Sites

by Shawn Zeller, CQ Staff
Published at CQ WEEKLY

Don’t look now, but infringing on a prescription drug patent seems to be a violation of human rights.

That’s just one of the oddities in a battle brewing between the government of Thailand and a Washington-based advocacy group called USA for Innovation. Late last month, the group took out a full-page ad in The Wall Street Journal, likening the government of Thai Prime Minister Surayud Chulanont, who came to power in the wake of a military coup last summer, to the repressive regime in neighboring Myanmar, a longtime and often brutal violator of basic human rights.

It turned out, however, that the ad’s sponsors saw the Thai regime’s main trespass as pharmaceutical, not strictly political: It had recently approved the importation from India of some generic treatments for AIDS and heart disease. “Such theft,” the group thundered, “costs America $250 billion and 750,000 jobs per year.”

Perhaps. But the rest of the international human rights community isn’t exactly rallying to what appears to be a crusade captained by American drug companies. Indeed, human rights activists say that World Trade Organization (WTO) rules give the Thai government every right to make cheaper generic drugs available to its citizens under the provisions of compulsory licensing, ie., a mandate for patent holders to permit other companies to make the same product. Pharmaceutical companies reached an initial round of compulsory licensing agreements in the 1990s, when South Africa sought to make AIDS treatments more widely available to its impoverished AIDS-afflicted citizens.

In fact, says Robert Weissman, director of the human rights group Essential Action, “Thailand is doing exactly what anyone who cares about public health would want them to do.”
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In 2001, the World Trade Organization revised its rules to permit any country to issue compulsory licenses for any drug it pleases, provided that a generic manufacturer first tries to negotiate a deal with the patent holder.

American drugmakers therefore aren’t objecting to Thailand’s importation of cheaper generic substitutes for the U.S.-made AIDS treatments: Merck & Co.’s Stocrin and Abbott Laboratories’ Kaletra. Rather, they are taking issue with Thailand’s approval of the substitute heart medicine, a copy of the Plavix pill, manufactured jointly by Bristol-Myers Squibb Co. and Sanofi-Aventis. That move potentially could make compulsory licensing a routine principle for nations importing all kinds of pharmaceuticals.

Which would seem, in turn, to be the reason that Congress has lately taken up the cause of USA for Innovation even though the group’s drug industry supporters have yet to make themselves officially known. In March, four Democratic senators, Robert Menendez and Frank R. Lautenberg of New Jersey, Dianne Feinstein of California and Thomas R. Carper of Delaware, as well as Independent Joseph I. Lieberman of Connecticut, wrote to U.S. Trade Representative Susan C. Schwab asking her “to encourage the Royal Thai Government to consult with our innovative companies,” to address the new Thai policy seeking “to expropriate patents on all manner of innovative medicines not used to address urgent public health needs.”

And not long after that, at the end of April, Schwab’s office added Thailand to a priority watch list of violators of U.S. intellectual property rights. At a press briefing that day, USTR official Victoria Espinel said her office was not accusing Thailand of violating WTO rules; it was, rather, noting the new licensing among a number of unspecified intellectual property concerns in the Thai case.

International trade watchers again weren’t buying the reasoning. The USTR decision came across as “arbitrary and political,” says James Love, director of Knowledge Ecology International, a Washington advocacy group that focuses on expanding drug availability in the developing world. “Just a list of people that lobby groups want put on the list.”

Still, no one seems to know with certainty just who these particular lobbyists are. Mark Grayson, a spokesman for the main prescription drug trade group PhRMA, says it does not fund USA for Innovation. A Merck spokesman also denied that it had provided funding. Neither Abbott Laboratories nor Bristol-Myers Squibb responded to requests for comment.

Ken Adelman, the top arms control negotiator in the Reagan administration, is listed as USA for Innovation’s executive director but only offered a statement reiterating the content of the group’s ad campaign.

But Adelman’s other job, as a senior counselor to the public relations firm Edelman, has stirred great interest in the Thai press. Edelman has several drug industry clients, and until last week the company represented Thaksin Shinawatra, the former Thai prime minister. Edelman spokesman Todd McGovern would not confirm or deny that the firm was involved.

News Release: Reaction from Public Health, AIDS Organizations to Democratic Leadership-Bush Administration Announcement on Trade Policy

For Immediate Release
Monday, May 14, 2007

For more information contact:
Asia Russell/Health GAP: +1 267 475 2645
Robert Weissman/Essential Action: +1 202 360 1844
Matt Kavanaugh/Student Global AIDS Campaign: +1 202 486 2488

On Friday May 11, the House Democratic leadership and the Bush Administration announced an agreement on trade issues, including patent and access-to-medicines-related provisions of trade agreements with Peru and Panama.

We remain concerned that while some first steps have been taken to lessen the harm of U.S. trade agreements, it is still the case that, if passed by Congress, these trade agreements with Peru and Panama will restrict rather than expand access to lifesaving medicines.
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The first thing that must be said about the agreement is: nothing definitive can be said until more details emerge, and final textual amendments are presented. In the case of trade agreements, details and specificity are of crucial importance.

A better process would have involved a transparent discussion of key issues, and an opportunity for more structured input and comment on unfolding details from Members of Congress and the public. That better process could only have yielded a better outcome.

On the substance, it appears the Democratic leadership has taken some first steps to make U.S. trade agreements less harmful to public health. It is not true, as some news accounts have suggested, that the May 11 deal will limit brand-name drug companies’ patent and related monopolies. In a best-case scenario, what the deal will do is limit the extent to which U.S. trade agreements expand brand-name drug companies’ monopolies.

However, arguing about how to make trade deals “less harmful” is the wrong framework. When it comes to public health, the United States should aspire to a higher standard: first, and at minimum, to do no harm; and second, to use international agreements to address access-to-medicines, efficient innovation of medical technologies and other pressing global public health priorities. Trade agreements modified in accord with the May 11 announcement will fail to meet that test.

More will be required in order to meet previously guaranteed rights that countries can prioritize public health and take measures to guarantee access to medicines for all. The Democratic leadership was not able to eliminate all of the life-threatening provisions in U.S. trade agreements, which themselves build on a World Trade Organization framework that is already heavily biased to favor Big Pharma.

For example, the preservation of data exclusivity alone is a gigantic gift to Big Pharma. Data exclusivity — rules preventing generics from relying on clinical test data from brand-name companies — is Big Pharma’s top agenda item for trade deals, and a major impediment to generic competition. In addition, the reported time limits and exceptions to data exclusivity announced on May 11 may be narrower than initially reported.

Moreover, it is very dangerous to give any additional latitude to an administration that has shown itself to operate in bad faith on access-to-medicines issues. Just last month, USTR placed Thailand on the “priority watch” list for lawfully issuing compulsory licenses. Formal rights preserved in free trade agreements are of limited value if USTR is going to apply informal pressure, use the Special 301 process, and coerce countries during trade agreement implementation phases — all to undermine access-to-medicines initiatives.

Developing countries should be free from agreements and USTR pressures that restrict their rights to use all available flexibilities for accessing more affordable generic medicines to meet their public health needs. Members of Congress should insist on a new approach to access to medicines issues with trading partners, rather than accepting a partial package of reforms.

Bangkok Post Letter: Commentator an advisor to law firm that represents Big Pharma

by Robert Weissman
Submitted to the Bangkok Post

The editor:

The Bangkok Post should not accept op-ed submissions without requiring full disclosure of relevant affiliations from contributors.

The latest affiliate of a U.S. law firm to offer views on Thailand’s legal and admirable decision to issue compulsory licenses on important medicines is Ashley Wills (Putting US-Thai relations on track, May 11). He is identified as former assistant U.S. Trade Representative — which should itself suggest bias on the matter. Not identified is his current position: senior business advisor at the global law firm WilmerHale. Among WilmerHale’s clients: multinational drug companies Pfizer, Schering Plough and Wyeth, and medical technology firms Becton Dickinson and Perkin Elmer.

As compared to the hysterical rants of Ken Adelman and USA for Innovation, Ambassador Wills may seem reasonable. He is not.
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He deceptively suggests that Thailand’s compulsory licenses violate the “spirit” of World Trade Organization rules, when he knows they were completely legal.

He then says, bizarrely, that the legality of Thailand’s actions is “irrelevant,” because the compulsory licenses are bad policy. He strangely fails to acknowledge that the compulsory licenses have lowered drug prices dramatically (around the world, as well as in Thailand) and will enable the Thai government to expand treatment dramatically, saving thousands of lives. Surely this is part of the calculation of whether the compulsory licenses are good policy or not.

Wills references the Clinton Foundation’s recent announcement of reduced prices for important AIDS drugs, without acknowledging that the Clinton Foundation’s best price deals are for generics. In a country like Thailand, where many important medicines are patented, the only way to capitalize on the Clinton Foundation deals is to issue compulsory licenses. Wills also conveniently neglects to mention that Bill Clinton himself forcefully endorsed Thailand’s actions.

Wills makes the utterly groundless claim that the compulsory licenses will affect foreign investment in Thailand. Investors are not swayed by propaganda. If they assess there are good business opportunities, they will invest. If not, they won’t. No serious person or business — and investors are nothing if not serious — believes that the compulsory licenses evidence a broad disdain for property rights.

Wills alleges the compulsory licenses may hurt the medical tourism business in Thailand, when he knows perfectly well that the licenses apply to the public sector only. Medical tourists will not be able to access compulsory licensed products even if they so desire.

And he makes the shameful and untrue argument that World Health Organization-approved generic medicines are of dubious quality. He might as easily claimed that there are concerns about safety and efficacy of brand-name products, because these products on numerous occasions have been pulled from the market, or cited for quality problems, after approval by the U.S. Food and Drug Administration, as well as other leading drug regulatory agencies.

Ambassador Wills concludes his submission with a call for good faith. A little good faith would surely be desirable. That means disclosures of business affiliations and conflicts of interest, and an end to the deceptive propaganda spread by Big Pharma and its representatives.

Robert Weissman, Director, Essential Action, Washington, DC

Clinton Foundation Announces a Bargain on Generic AIDS Drugs

by Celia W. Dugger
Published at The New York Times

Former President Bill Clinton announced yesterday that his foundation had negotiated deep price reductions for generic versions of costly, second-line AIDS drugs needed when the original medicines fail, as well as for less toxic, easier-to-use first-line medicines combined in a pill that can be taken once a day.

Standing next to Thailand’s health minister, Mr. Clinton also forcefully endorsed recent decisions by Thailand and Brazil to break patents held by American pharmaceutical companies that are charging prices Mr. Clinton described as exorbitant, but that drug company officials said were reasonable.

“No company will live or die because of high price premiums for AIDS drugs in middle-income countries, but patients may,” he said.
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The new prices would halve the cost of the drugs for better-off developing countries in Latin America and Asia and cut prices by 25 percent in poor countries, which were already paying lower prices, the foundation said. The second-line medicines will be bought with more than $100 million raised by a group of countries led by France. The improved first-line therapies will largely be financed by the Global Fund to Fight AIDS, Tuberculosis and Malaria and other donors.

Second-line drugs have typically cost about 10 times as much as first-line therapies. Costs have ballooned in Brazil and Thailand, which began programs to provide universal access to AIDS treatment years before African countries did, as patients have developed resistance to generic first-line treatments and have moved to brand-name second-line drugs.

The Clinton Foundation’s willingness to buy the generic drugs from the Indian manufacturers Cipla and Matrix will give developing countries leverage in bargaining with American companies for lower prices on branded antiretroviral drugs and may embolden some to follow Brazil and Thailand in overriding patents, AIDS activists said.

But developing countries still have reason to worry about retaliation from drug companies and trade sanctions by the United States. This year, Abbott Laboratories, based in Illinois, withdrew new drugs, including those for high blood pressure and AIDS, that it had planned to introduce in Thailand until the override on Abbott’s patent on the second-line drug, Kaletra.

United States trade officials last week put Thailand on a watch list for countries inadequately safeguarding the intellectual property rights of American companies, noting the overriding of drug patents.

Tido von Shoen-Angerer, who leads the campaign by Doctors Without Borders for access to medicines, said he was unsure whether the recent developments would encourage developing countries to exercise their rights under international trade rules more freely to make or import generic drugs.

“There’s a strong chilling effect from the U.S. action,” he said.

Drug company officials yesterday strongly defended their policies of charging better-off developing countries more for AIDS drugs than they did for poor countries, as well as the role of patents, which give inventor companies a monopoly on the sale of a drug, in stimulating the development of new drugs.

Jennifer Smoter, a spokeswoman for Abbott, said patents were needed “to ensure innovation in the future” but declined to respond to Mr. Clinton’s comment that “Abbott has been almost alone in its hard-line position here over what I consider to be a life and death matter.”

Abbott had been charging $2,200 annually per patient for Kaletra in middle-income developing countries, which include India, China, Brazil and Ukraine. Last month, it dropped the price to $1,000. The foundation’s new price for the generic is $695.

Jeffrey L. Sturchio, a vice president at Merck in New Jersey, says his company strives to balance providing the broadest possible access to AIDS drugs while maintaining financial incentives to attract companies to conduct research and development on new drugs.

Brazil and Thailand have overridden Merck’s patent on the AIDS drug efavirenz, an ingredient of the new, improved first-line AIDS therapies. Merck had been charging Brazil $577 annually per patient, a price it agreed to drop to $400 a year after Brazil said it was considering overriding the patent. The Clinton Foundation’s new price for the generic drug is $164.

The Doha Resolution

SENATE RESOLUTION 241/ HOUSE RESOLUTION 525

Expressing the sense of the Senate (House of Representatives) that the United States should reaffirm the commitments of the United States to the 2001 Doha Declaration on the TRIPS Agreement and Public Health.
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110th CONGRESS, 1st Session

IN THE SENATE OF THE UNITED STATES (HOUSE OF REPRESENTATIVES)

June 20, 2007 (June 28, 2007)

Mr. BROWN (Mr. ALLEN) submitted the following resolution; which was referred to the Committee on Finance (Committee on Ways and Means).

RESOLUTION

Expressing the sense of the Senate that the United States should reaffirm the commitments of the United States to the 2001 Doha Declaration on the TRIPS Agreement and Public Health and to pursuing trade policies that promote access to affordable medicines.

Whereas the World Trade Organization (WTO) administers and enforces the Agreement on Trade-Related Aspects of Intellectual Property Rights (in this preamble referred to as `the TRIPS Agreement’) to safeguard access to essential drugs;

Whereas, in 1999, the World Health Assembly, by consensus including the United States, adopted Resolution 52.19 on the World Health Organization’s Revised Drug Strategy, which expressed concern `about the situation in which one third of the world’s population has no guaranteed access to essential drugs, [and] in which new world trade agreements may have a negative impact on local manufacturing capacity and the access to and prices of pharmaceuticals in developing countries,’ and urged member states to `ensure that public health rather than commercial interests have primacy in pharmaceutical and health policies and to review their options under’ the TRIPS Agreement;

Whereas, in 2001, the member states of the WTO, by consensus including the United States, adopted the Doha Declaration on the TRIPS Agreement and Public Health, in which member states agreed that `intellectual property protection is important for the development of new medicines’, but also expressed `concerns about its effects on prices’;

Whereas the Doha Declaration further states that the TRIPS Agreement `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’;

Whereas Article 31 of the TRIPS Agreement allows each member state the flexibility to issue compulsory licences which permit the use of the subject matter of a patent, and gives member states broad latitude for such use;

Whereas the World Health Organization’s 2006 Report of the Commission on Intellectual Property Rights, Innovation and Public Health emphasized the need for innovation in medical technologies and access to such innovation, and the report also–

(1) states that the Doha Declaration clarifies the right of governments to use compulsory licensing as a means of resolving tensions that may arise between public health and the protection of intellectual property rights, and to determine the grounds for using compulsory licensing;

(2) recommends that developing countries provide for the use of compulsory licensing provisions in legislation as one means to facilitate access to affordable medicines through import or local production;

(3) recommends that bilateral trade agreements not seek to impose obligations to protect intellectual property rights that are greater than those required under the TRIPS Agreement, because such obligations could potentially reduce access to medicines in developing countries; and

(4) recommends that developing countries should not impose restrictions for the use of, or reliance on, data from pharmaceutical development tests in ways that would exclude fair competition or impede the use of flexibilities built into the TRIPS Agreement, unless such a restriction is required for public health reasons;

Whereas the Governments of Thailand and Brazil have issued compulsory licenses to gain access to less expensive versions of second-generation anti-retroviral drugs in order to treat a much larger number of HIV/AIDS patients;

Whereas the Government of the United States has recognized the right of the Government of Thailand to issue compulsory licenses in accordance with the laws of Thailand and the obligations of the Government of Thailand as a member of the WTO;

Whereas the 2007 `Special 301′ Report, the annual review of intellectual property rights protection and enforcement conducted by the Office of the United States Trade Representative, elevated Thailand to the Priority Watch List, pursuant to section 182 of the Trade Act of 1974 (19 U.S.C. 2242), for reasons including `indications of a weakening of respect for patents, as the Thai Government announced decisions to issue compulsory licenses for several patented pharmaceutical products’;

Whereas the 2007 `Special 301′ Report singled out Brazil for having `at times indicated consideration of the use of compulsory licensing on patented pharmaceutical products’;

Whereas the 2007 `Special 301′ Report cited 21 developing countries for `inadequate’ intellectual property rights protections on pharmaceutical test data;

Whereas the United States Trade Representative has negotiated or is seeking to complete several bilateral or regional trade agreements with developing countries that contain further obligations to protect intellectual property rights, including–

(1) limitations on the grounds for issuing compulsory licenses;

(2) requirements that countries adopt periods of data exclusivity on the scientific evidence used to determine that drugs are safe and effective, which either delays the timely entry of generic drugs into the market or forces competitors producing generic drugs to invest in costly, time-consuming, and redundant clinical trials, including trials that violate ethical rules concerning the repetition of experiments on humans;

(3) extensions of patent terms beyond 20 years;

(4) linkage between drug registration and assertions of patent protection, so that agencies responsible for the regulation of drugs are prohibited from granting marketing approval to a generic version of a medicine if the product is covered by a patent; and

(5) obligations to extend patent protection to minor improvements in, or new uses of, older products; and

Whereas the United States is a user of flexibilities provided in the TRIPS Agreement, including the use of involuntary authorizations to use the subject matter of patents in a number of important sectors, including medical devices, software, and automobile manufacturing: Now, therefore, be it

Resolved, That it is the sense of the Senate that the United States should–

(1) honor the commitments the United States made in the 2001 World Trade Organization Doha Declaration on the TRIPS Agreement and Public Health, which allows member states of the World Trade Organization to use `to the full’ the flexibilities in the Agreement on Trade-Related Aspect of Intellectual Property Rights (in this resolution referred to as `the TRIPS Agreement’) `to protect public health and, in particular, to promote access to medicines for all,’ including the issuance of compulsory licenses on grounds determined by member states;

(2) not place countries on the `Special 301′ Priority Watch List under section 182 of the Trade Act of 1974 (19 U.S.C. 2242) for exercising the flexibilities on public health provided for in the TRIPS Agreement, such as issuing compulsory licenses to obtain access to generic medicines in accordance with the Doha Declaration;

(3) not ask trading partners who are developing nations to adopt measures to protect intellectual property rights that relate to public health in excess of protections required in the TRIPS Agreement; and

(4) support new global norms for promoting medical research and development that seek to provide a sustainable basis for a needs-driven essential health agenda.

The Doha Declaration

The Doha Declaration on the TRIPS Agreement and Public Health

WORLD TRADE ORGANIZATION
DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH

Adopted on 14 November 2001

1. We recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.
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2. We stress the need for the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and international action to address these problems.

3. We recognize that intellectual property protection is important for the development of new medicines. We also recognize the concerns about its effects on prices.

4. We agree that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement 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.

In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.

5. Accordingly and in the light of paragraph 4 above, while maintaining our commitments in the TRIPS Agreement, we recognize that these flexibilities include:

(a) In applying the customary rules of interpretation of public international law, each provision of the TRIPS Agreement shall be read in the light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles.
(b) Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.
(c) Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.
(d) The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each Member free to establish its own regime for such exhaustion without challenge, subject to the MFN and national treatment provisions of Articles 3 and 4.

6. We recognize that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002.

7. We reaffirm the commitment of developed-country Members to provide incentives to their enterprises and institutions to promote and encourage technology transfer to least-developed country Members pursuant to Article 66.2. We also agree that the least-developed country Members will not be obliged, with respect to pharmaceutical products, to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement or to enforce rights provided for under these Sections until 1 January 2016, without prejudice to the right of least-developed country Members to seek other extensions of the transition periods as provided for in Article 66.1 of the TRIPS Agreement. We instruct the Council for
TRIPS to take the necessary action to give effect to this pursuant to Article 66.1 of the TRIPS Agreement.

Ken Adelman’s (New) Lies

by Robert Weissman
Published at HuffingtonPost.Com

One would think that an operation run by Ken Adelman — infamous for proclaiming that U.S. forces would enjoy a “cakewalk” in Iraq^1^ — would, at least, be a little bit hesitant to label anyone a “liar.”

But that would suggest something resembling humility and a conscience.

Among other posts, Ken Adelman now runs something called USA for Innovation. This organization has launched a massive campaign against Thailand, which has taken the noteworthy decision to prioritize public health concerns over multinational corporate interests, and authorize generic competition for several important drugs while they remain on patent.
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USA for Innovation’s latest release announces that it has created a website, Thailies.com, “to draw attention to the deceit in Thailand’s decision to steal American and European innovation.”

The group says that “today’s lie” is that Thailand is a poor country that cannot afford Western medicines. To prove that Thailand is not so poor, the website cites economic data showing that the Thai economy is fast growing (which it is).

What the website does not do is provide the single most relevant statistic to determine the country’s relative ability to pay the sky-high prices charged by brand-name drug monopolists: per capita income.

According to the World Bank, Thailand’s per capita income is $2,720 — roughly one-sixteenth U.S. per capita income.

One of the products for which Thailand issued a “compulsory license” — an authorization of generic competition for a product that remains on patent — was Kaletra, an important combination HIV/AIDS drug made by the Chicago drug giant Abbott Laboratories. Abbott’s “discount” price for Thailand before it issued its compulsory license: $2,200.

Thailand maintains a public health service that aims to provide universal access to needed medicines. But the government’s healthcare budget faces constraints, and it is unable to provide universal access to important medicines. The government has been very clear that the savings it obtains from generic competition will be used exclusively to provide greater coverage for the medicines it has compulsory licensed. The government says just the initial price reductions for the HIV/AIDS drug efavirenz (the patented version of which is marketed by Merck) will enable it to provide access to the drug to an additional 20,000 people; the initial price reductions for the generic versions of the Abbott product Kaletra will enable the country to quadruple the number of people receiving this lifesaving drug; and the price reduction for clopidogrel (sold by Sanofi-Aventis as Plavix) will enable Thailand to provide it in the public sector. In sum, says the government, the purpose of its compulsory licenses is “to increase access to patented essential drugs, rather than to save budget” expenditures.

Why is Ken Adelman working so hard to denounce Thailand’s public health initiatives?

Adelman says he serves as senior counselor at Edelman Public Relations Worldwide.

Among its largest clients, Edelman lists Abbott Laboratories and Merck. Half of the fourteen companies Edelman lists as its largest clients are drug makers. Besides Abbott and Merck, these are AstraZeneca, Johnson & Johnson, Novartis, Pfizer and Schering-Plough. (To see the firm’s brochure with the top client list, go to: http://www.edelman.com/about_us/welcome/ and click on “corporate brochure” under the “about us” header.)

There are life-and-death stakes in the deception campaign run by Adelman, USA for Innovation and Big Pharma more generally. Through its compulsory licensing program, Thailand is going to keep people alive who would otherwise die, and avoid needless suffering. Adelman, Big Pharma, et. al. would prefer that the country follow the norm, which is to choose to let people die and suffer rather than offend multinational corporate interests. Adelman and Big Pharma’s top priority with their pressure campaign is to send a message to other countries: Don’t dare to follow the Thai example.

Unfortunately for Big Pharma, but fortunately for people in developing countries and anyone who cares about global public health, Brazil on Friday announced it would follow Thailand in issuing a compulsory license on an important HIV/AIDS drug. Big Pharma’s grip may be loosening — which means there’s every reason to expect stepped-up attacks from the industry and its allies.

^1^ Among Adelman’s other claims about Iraq:

“Hussein constitutes the number one threat against American security and civilization” (Ken Adelman, “Cakewalk in Iraq,” Washington Post, February 13, 2002).

After the anthrax scare in Washington, D.C.: “I think the most likely source of this is Iraq.” He went on to say, “But to tell you the truth, I don’t think we have to show evidence beyond a reasonable doubt that Iraq is behind a lot of the terrorism right now. Listen, this is not a court of law that we need this kind of evidence. It is war we’re talking about.” (Fox News, October 25, 2001)

News Release: Brazil Decides to be Held Hostage No More

For Immediate Release
For more information, contact Robert Weissman, 202-387-8030

Brazil Decides to be Held Hostage No More: Statement in Response to Brazil’s Issuance of a Compulsory License on Efavirenz

The following is a statement of Robert Weissman, director, Essential Action:

Developing country governments must decide whether to let themselves and their people be held hostage by brand-name companies holding patent monopolies — monopolies granted by the governments themselves — or to act to make important medicines affordable and available to their people.

Today, in announcing a compulsory license on the important HIV/AIDS product efavirenz, Brazil finally decided it no longer wants to be held hostage.
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Congratulations are due to Brazil, and especially to the Brazilian activists and public health advocates who have long toiled for this day.

Brazil’s initiative is a crucial step to help the country maintain its effective program to treat people with HIV/AIDS, the viability of which is threatened by high brand-name prices for second-generation drugs.

It will also have major beneficial externalities. Brazil’s substantial market will help create economies of scale for generic makers of efavirenz, and — combined with the generic market created by Thailand’s issuance of a compulsory license on efavirenz late last year — will drive down generic prices on a global basis.

Following the breakthrough initiatives of Thailand late last year and earlier this year, Brazil’s action will also help demonstrate the viability and importance of compulsory licensing.

It is time for developing countries to exercise much more aggressively the flexibilities they have fought to maintain in international trade rules, and not just for HIV/AIDS drugs. The only sustainable way to drive down prices is through generic competition.

Although they have grudgingly conceded some ground in the terrain of HIV/AIDS, Big Pharma’s preference is to maintain a single global price for its medicines. That means, plain and simple, that most people in the world — and the vast majority in the developing world — cannot afford brand-name products. Every person should view that as intolerable.

Countries cannot easily overcome the problems of poverty, but they can easily address the problem of artificially high drug prices maintained by patent monopolies. Thailand, Malaysia, Indonesia, Zambia, Malawi, Ghana, Eritrea, Mozambique, South Africa and others — and now Brazil — have shown the way.