New Trade Agreement Language To Allow Developing Countries More Flexibility in Circumventing Drug Patents, Other Restrictions

Published at Kaiser Daily HIV/AIDS Report

Democratic lawmakers and U.S. trade officials are in the final stages of negotiation over language to be added to international free trade agreements that would allow developing countries more flexibility in circumventing drug patents and other restrictions on pharmaceuticals, sources said recently, CongressDaily reports. The new text would bring exceptions to intellectual property law closer in line with the World Trade Organization-endorsed Doha Declaration, which is aimed at lowering trade barriers to promote economic development in poorer nations. Doha also aims to ensure that developing countries can take steps to protect public health, including issuing compulsory licenses to override patents.

According to CongressDaily, the issue of compulsory licensing has “taken on increased importance” with recent moves by Thailand and Brazil to manufacture generic versions of antiretroviral drugs and other medications. Thirty-five House Democrats, led by Reps. Henry Waxman (Calif.) and Tom Allen (Maine), in a letter released on Wednesday criticized U.S. Trade Representative Susan Schwab for placing Thailand on a priority watch list in the trade office’s annual report. They also called on Schwab to reverse the designation. “It is difficult to interpret this decision as anything other than retaliation for Thailand’s recent actions,” the letter said, adding, “It sends a troubling message, not only to Thailand but to the whole world, that the exercise of recognized public health flexibilities in trade obligations is frowned upon by” the U.S.
—–

Intellectual property and health provisions were among the “final sticking points” in negotiations over the trade agreement language between House Ways and Means Subcommittee Chair Sander Levin (D-Mich.), Ways and Means Committee Chair Charles Rangel (D-N.Y.) and the Bush administration, CongressDaily reports. Robert Weissman, director of Essential Action, said, “Where the rubber hits the road is on data exclusivity and compulsory licensing. The question is: Is data exclusivity going to be an effective prohibition on compulsory licensing?” He added, “If the U.S. is able to get more and more countries to adopt these standards, it becomes increasingly difficult for the remaining ones to resist doing more than (multilateral agreements) require.” The language has not been completed, but U.S. trade officials hope to finalize in time for agreements with Panama and South Korea to be signed next week (Vaughan, CongressDaily, 6/21).

Related Survey
In related news, 61% of U.S. adults say they believe that developing countries should be allowed to issue compulsory licenses for antiretroviral drugs if doing so would enable more people to access treatment, according to a recent poll, the Wall Street Journal reports.

The Wall Street Journal Online/Harris Interactive Health Care poll included 2,246 adults and was conducted between June 11 and June 13. According to the findings, 57% of people said they supported Brazil’s decision to issue a compulsory license for Merck’s antiretroviral efavirenz and provide a lower-cost generic version to residents, while 20% of respondents said they oppose the licensing. The poll also found 33% of respondents said they believe that breaking drug patents on antiretrovirals hinders development of new drugs, while 40% of respondents said they disagree with that statement.

Three-quarters of survey respondents said condom education and distribution programs are the most effective methods of preventing the spread of HIV/AIDS; 51% said the best method is through abstinence education programs; and 38% said abstinence programs hinder, rather than help, efforts to fight HIV/AIDS. The poll also showed that 40% of those surveyed said they believe the HIV/AIDS pandemic has become worse during the last five years; 16% said they felt conditions have improved; and 32% said conditions have remained steady (Bright, Wall Street Journal, 6/20).

Thailand is Within its Rights, Say US Reps

by Achara Ashayagachat & Apiradee Treerutkuarkul
Published at Bangkok Post

Some members of the US House of Representatives have demanded the US Trade Representative (USTR) remove Thailand from the Special 310 Priority Watch List (PWL) and respect its right to issue compulsory licences for drugs. Republican representative from California Henry Waxman, in a letter on Wednesday signed by 34 congressional colleagues, told USTR ambassador Susan Schwab to reply by July 9 on their call for her office to reassess the policy.

The letter said Thailand’s use of compulsory licensing to purchase generic versions of several drugs that were too costly for the government was a legitimate act within the international rights and obligations stated in the agreement on Trade-Related Aspects of Intellectual Property (Trips), under the World Trade Organisation (WTO).
—–

“It is difficult to interpret the decision [to add Thailand to the PWL in the annual USTR trade report] as anything other than retaliation for Thailand’s recent actions,” said the letter.

The letter urged the USTR to reassess its policy towards Thailand to reflect the US commitment and respect for the rights of other nations to implement their intellectual property rules in a way that supports public health.

Being put on the PWL has led to the elimination of the duty-free access Thailand currently receives under the Generalised System of Preferences (GSP) for gold jewellery and other exports to the US. This will take effect on July 1.

The GSP cut penalises the legitimate exercise of the right to issue compulsory licensing, the congressmen said in the letter.

“We call on you to take steps to remove Thailand from the Special 301 Priority Watch List and abandon any further retaliation for Thailand’s public health efforts, and ask you to commit to respecting the rights of WTO members to freely exercise public health flexibilities under the Trips and the Doha Declaration, including compulsory licensing,” they added.

The compulsory licences Thailand issued were for non-commercial government use and therefore Thailand was under no obligation to consult with the patent holders, they said.

The licences are for Aids and heart disease medications.

Washington-based Essential Action, a non-governmental organisation, backed the move by the US lawmakers.

The letter by the 35 congressmen reflected growing sentiment in congress that US policy on access to medicines must change, its director, Robert Weissman, said in a statement.

“By using legal methods to authorise price-lowering generic competition on overpriced Aids and heart-disease drugs, Thailand has shown the world what it means to place public health over commercial considerations,” he said.

Essential Action agreed with the lawmakers that the USTR had put Thailand on the priority watch list to retaliate for the decision to use compulsory licensing.

“USTR’s retaliatory placement of Thailand on the priority watch list was designed to punish the country for prioritising public health over the interests of Big Pharma [large pharmaceutical companies],” he said.

The trade measure was designed to send a message to other developing countries that they will be punished for issuing compulsory licences and utilising the public health flexibilities available in the WTO rules, he said.

TRADE: New Language Would Give Developing Countries Leeway On Pharmaceuticals

by Martin Vaughan
Congress Daily

New language to be added to trade agreements is designed to give poor countries more leeway to get around patent and other restrictions on pharmaceuticals, by going further than the flexibility already included in side letters to agreements with Peru and Panama, according to House and private sector sources.

The new text, in the final stages of discussion between Democrats and U.S. trade officials, will bring exceptions to intellectual property rules closer in line with the 2001 Doha Declaration on those rules and public health, these sources said.

That declaration aimed to make sure that developing countries could take steps to protect public health, including issuing compulsory licenses to override patents.
—–

A bipartisan, conceptual agreement struck between lawmakers and the administration in May provided that the side letter, which has been a part of free-trade deals since the U.S.-Morocco trade agreement, will be incorporated into the text of agreements with Peru, Panama, Colombia and South Korea.

Democrats have long pushed for that step because they argue that side letters do not carry the same legal weight and enforceability as agreement text.

The conceptual deal also envisioned making direct reference to the Doha Declaration in the text of trade agreements. But sources said it is likely the text will also alter the wording of the side letter to make it more closely match that of the declaration — a step that pharmaceutical firms have pressed U.S. officials to oppose.

“Simply taking the side letter and plugging it into the text of the agreement was fine with us,” said one industry source. “If there are changes, we will have to see what the changes are.”

The side letter to the U.S.-Peru deal on exceptions for public health states that the agreement’s provisions “do not affect a Party’s ability to take necessary measures to protect public health by promoting access to medicines for all, in particular concerning cases such as HIV/AIDS, tuberculosis, malaria, and other epidemics as well as circumstances of extreme urgency or national emergency.”

House Ways and Means Trade Subcommittee Chairman Sander Levin, D-Mich., persuaded U.S. trade officials to drop the word “necessary” from that formula, which does not occur in the related section of the Doha Declaration, sources said.

Public health advocates have also urged striking the language regarding “circumstances of extreme urgency or national emergency,” which could be seen as limiting situations in which Doha flexibilities can be applied. However, that language will remain in the FTA text.

Intellectual property and health provisions were among the final sticking points in negotiations between Levin, Ways and Means Chairman Rangel, and the administration on the final text, which also included labor, environmental, and investment provisions.

That text has still not been completed, but U.S. trade officials are hoping to finalize it in time for agreements with Panama and South Korea to be signed next week.

Health activists said the new language stressing the primacy of the Doha Declaration is important, because the side letter left ambiguity as to whether obligations to protect pharmaceutical test data in the deals would keep needed medicines from coming to market, even after a country had broken patents on the drugs.

“Where the rubber hits the road is on data exclusivity and compulsory licensing,” said Robert Weissman, director of Essential Action. “The question is: Is data exclusivity going to be an effective prohibition on compulsory licensing?”

Activists and their Democratic allies have long pushed the administration to back off the more stringent protections for brand-name drugs in trade deals — including the requirement that countries prevent test data from being used to bring generics to market for a five-year period after the brand-name version has been registered.

“If the U.S. is able to get more and more countries to adopt these standards, it becomes increasingly difficult for the remaining ones to resist doing more than [multilateral agreements] require,” said Weissman.

The issue has taken on increased importance with recent moves by Thailand and Brazil to issue compulsory licenses to manufacture generic versions of treatments for HIV/AIDS and other afflictions.

Thirty-five House Democrats led by Reps. Henry Waxman of California and Tom Allen of Maine Wednesday criticized Trade
Representative Schwab in a letter for naming Thailand a “priority foreign country” in the trade office’s annual list of intellectual property rights violators. They called on Schwab to reverse that designation.

“It is difficult to interpret this decision as anything other than retaliation for Thailand’s recent actions. It sends a troubling message, not only to Thailand but to the whole world, that the exercise of recognized public health flexibilities in trade obligations is frowned upon by the United States,” the lawmakers wrote.

The House Democrats wrote that they were concerned that the “Special 301” citation would lead to a suspension of duty-free benefits for Thailand under the Generalized System of Preferences.

Comment on Congressional Letter Opposing USTR Pressure on Thailand

For Immediate Release
For More Information Contact: Sarah Rimmington or Robert Weissman, Essential Action, (202) 387-8030

Following is the statement of Robert Weissman, director of Essential Action, regarding a letter sent today by Representative Henry Waxman and nearly three dozen Members of Congress to the U.S. Trade Representative. The letter protests USTR’s inclusion of Thailand on the “Priority Watch List” for issuing lawful compulsory licenses, and is available here.

By using legal methods to authorize price-lowering generic competition on overpriced AIDS and heart-disease drugs, Thailand has shown the world what it means to place public health over commercial considerations. Thailand has been very clear that the savings it accrues will be used to expand access to important medicines.

USTR’s retaliatory placement of Thailand on the priority watch list was designed to punish the country for prioritizing public health over the interests of Big Pharma, and to send a message to other developing countries that they will be penalized for issuing compulsory licenses and utilizing the public health flexibilities available in the World Trade Organization’s intellectual property agreement.

But the times are changing. The letter released today by Representative Waxman and signed by nearly three dozen Members of Congress reflects growing sentiment in Congress that U.S. policy on access to medicines questions must change. This emerging view is that developing countries must be permitted to take legal measures to reduce the price of medicines and make them more widely available. These Members of Congress recognize that the U.S. government damages the nation’s commitments, reputation, aspirations and legitimate national interest when it reflexively adopts Big Pharma’s agenda overseas.

WSJ Online/Harris Interactive Health-Care Poll: Majority Would Allow Poorer Nations To Break AIDS-Drug Patents, Poll Shows

by Beckey Bright
Published at The Wall Street Journal Online

Sixty-one percent of U.S. adults believe poorer countries should be allowed to break companies’ patents on HIV/AIDS drugs if doing so would help them treat more of their population, according to a new poll.
—–

When asked specifically about a recent move by Brazil to break the patent on an AIDS drug made by Merck & Co. and provide a generic version instead, 57% said they were in favor of the country’s decision, while 20% said they were opposed, the Wall Street Journal Online/Harris Interactive health-care poll found.

Thirty-three percent of those polled said they believe that ignoring companies’ patents on HIV/AIDS drugs hinders the development of new drugs, while 40% said they disagree. The poll of 2,246 adults was conducted online June 11-13.

Three-quarters of respondents said programs that teach about and distribute condoms will be most effective in preventing the spread of HIV/AIDS. But half said they agree that the best way to prevent thespread of HIV/AIDS is through programs that teach abstinence.

Forty percent of Americans think the global HIV/AIDS epidemic has worsened in the last five years, down from 58% who said they felt that way when asked the same question in 2004. In the latest poll, 16% said they felt conditions have gotten better, while 32% said things have stayed about the same.

Poll excerpt:

“Brazil recently announced that they will break the patent of an HIV/ AIDS drug and purchase a generic version against the wishes of the drug’s patent holder. Do you favor or oppose Brazil’s decision?”

Strongly/Somewhat favor (NET)——- 57%
Strongly favor————————– 23
Somewhat favor———————— 34
Strongly/Somewhat oppose (NET)—- 20
Somewhat oppose——————— 13
Strongly oppose———————— 7
Not sure——————————— 23
—–

See full results of poll here.

Letter to The Hill: WTO allows broad grounds to copy patented medicines

by Peter Maybarduk and Robert Weissman
Published at The Hill

Ian Swansons article, “PhRMA takes aim at Thailand for production of generics, hints that it will push for sanctions (May 23),” states, “World Trade Organization (WTO) rules do grant poor countries the right to issue compulsory licenses authorizing the production of generic drugs to deal with public health crises.” While this is true, it is important to note WTO rules do not limit compulsory licensing to public health crises or to poor countries.
—–

Under the WTOs Agreement on Trade-Related Aspects of Intellectual Property Rights, countries are free to issue compulsory licenses on whatever grounds they choose (TRIPS Article 31). To remedy confusion about this point, the member countries of the WTO adopted the Doha Declaration on the TRIPS Agreement and Public Health. It specifically states, “Each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted (Paragraph 5(b)).” Government use or emergency circumstances such as public health crises simply allow members to bypass otherwise required procedures, such as negotiating with rights holders before issuing a license (TRIPS Article 31(b)).

On its Frequently Asked Questions page, the WTO calls the idea of an emergency requirement “a common misunderstanding.”

Also, the provisions of TRIPS Article 31 and Doha extend to all WTO Members. Indeed, rich countries routinely use compulsory licensing in a variety of contexts. The United States is likely the most frequent user of compulsory licensing.

~Peter Maybarduk and Robert Weissman of Essential Action, Washington

[This is the article they are referring to in the LTE]
PhRMA takes aim at Thailand for production of generics, hints that it will push for sanctions
May 23, 2007
By Ian Swanson
Published at The Hill:

Drug companies are making a concerted effort to increase pressure on Thailand and other developing countries to honor U.S. drug patents.

The Pharmaceutical Research and Manufacturers Association (PhRMA) is alarmed by Thailand’s decision to authorize the production of generic versions of two AIDS drugs that are still under U.S. company patents, as well as one cardiovascular drug.

In particular, U.S. drug-makers worry that other countries could emulate Thailand’s decision. Brazil earlier this month announced it will authorize a license for the production of an AIDS drugs, PhRMA notes.

PhRMA President and Chief Executive Officer Bill Tauzin said that in the long term, this move could cost U.S. jobs and cause the entire system of protecting intellectual property “to crumble.”

If other countries also issue compulsory licenses for the production of generic drugs, particularly emerging markets like Thailand, Tauzin said U.S. consumers would be forced to carry a greater burden of covering the industry’s research and development costs.

World Trade Organization (WTO) rules do grant poor countries the right to issue compulsory licenses authorizing the production of generic drugs to deal with public health crises. But critics feel Thailand is pushing the envelope by announcing a license for Plavix, a cardiovascular disease medication.

Tauzin met with Thailand Health Minister Mongkol na Songkhla on Tuesday to discuss the issuance of the three compulsory licenses. In a follow-up call to reporters, Tauzin emphasized that his talks with the Thai minister were frank and helpful, and that Mongkol emphasized that his country sees the issuance of compulsory licenses as a rare event.

Thailand officials have also suggested they may issue a compulsory license for a cancer drug, but Tauzin said Mongkol offered nothing new during the meeting on that subject.

Tauzin said Mongkol’s message to PhRMA was that many of Thailand’s citizens are mired in poverty and that the country has a need for access to cheap medicines. Tauzin said PhRMA=92s hope is that Thailand will fully consult with U.S. companies to lower drug costs without resorting to authorizing the production of generic drugs.

At the same time, Tauzin said that if Thailand continues to issue compulsory licenses for the production of drugs protected by patents, PhRMA could press the administration for tougher action. He specifically mentioned the possibility that the U.S. could eliminate trade preferences allowing some Thai imports to enter the country duty-free.

Indeed, the Office of the U.S. Trade Representative late last month issued an annual U.S. report on the status of intellectual property protections that faulted Thailand for deteriorating patent protections. The Special 301 report elevated Thailand to a list of priority watch countries, which could lead to a decision to withdraw trade preferences.

But it is unclear whether Washington will want to punish poor countries that issue compulsory licenses to increase their supplies of affordable drugs, particularly with Democrats in charge of Congress and PhRMA’s influence on the wane.

Thailand’s actions have received support from some key advocates, including former President Bill Clinton, whose Clinton Foundation has worked with drug companies to lower prices for medicines in developing countries. The Reuters news service this week quoted Clinton as stating that “no company will live or die because of high price premiums for AIDS drugs in middle-income countries, but patients may.”

Rep. Henry Waxman (D-Calif.), in a statement released after his meeting with the health minister said the U.S. should respect Thailand’s decision.

But some in the pharmaceutical industry believe members of Congress will draw a distinction between drugs for the treatment of AIDS, malaria and tuberculosis, and those for other diseases such as cancer or heart disease. “How can a chronic, slow-acting, non-contagious condition be considered a public-health crisis?” asked one lobbyist.

He suggested there could be bipartisan support for actions against Thailand or other countries that issue compulsory licenses for non-AIDS drugs.

In March, five Democratic senators and 12 Democratic House members raised the issue in letters to U.S. Trade Representative Susan Schwab. They said the use of WTO rules to produce generic AIDS drugs is one thing, but the rules were not intended to be used on just any medicine.

While Thailand has argued the issuance of compulsory licenses was necessary to pay for drugs through its national health-care system, Tauzin said the country’s government, run by the military after a coup last year, has increased military spending while arguing it cannot afford to pay for patented drugs.

Tauzin said the debate will always be controversial because finding the balance between access to medicines and paying for research and development costs is always difficult. At the same time, he expressed some confidence that PhRMA’s arguments would have support.