Background on S.Res 241/H.Res. 525
S. Res. 241/H.Res 525 call for a
new direction in U.S. trade policy that encourages both access to
essential medicines and the innovation of new medical technologies to promote
public health in developing countries.
Both access to medicines and the
innovation of new treatments are crucial public health goals. In developing
countries, the price of medicines is often a life-and-death matter. For
example, generic competition for the older first-generation AIDS drugs has reduced
their price in developing countries by more than 98 percent, which was critical
to the massive scale-up in AIDS treatment seen over the past five years.
However, most newer, second-generation treatments are under patent and current
treatment levels (including people receiving treatment through U.S. PEPFAR
funding) will not be sustainable unless much cheaper generic versions become
available. At the same time, new approaches to medical research and development
(R&D) are needed in order to spur innovation to meet priority health needs
currently ignored within the existing global system to support medical R&D.
The resolutions - which were
introduced by Senator Sherrod Brown and Representative Tom Allen - urge the
United States to:
1.
Honor the commitments it made in the 2001 World Trade Organization (WTO)
Doha Declaration on the TRIPS Agreement and Public Health.
The World Trade Organization’s
1995 Agreement on Trade-Related Aspects of Intellectual Property (TRIPS)
requires all member countries to adopt U.S.-style patent rules for all
products, including pharmaceuticals. The 2001 Doha Declaration clarified that
developing countries maintain substantial flexibilities under TRIPS, and that
TRIPS should be interpreted in a fashion that supports the obligation to
protect public health and promote access to medicines.
The Doha Declaration affirms that
WTO members may use "to the full" the flexibilities in 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. Compulsory licenses are authorizations of
price-lowering generic competition for products that remain on patent. Generic
competition for AIDS drugs has reduced their price in developing countries by
more than 98 percent.
The United States joined the
consensus of WTO member countries adopting the Doha Declaration in 2001.
Unfortunately, the U.S. administration has not respected the letter or spirit
of the Declaration in several ways, including by negotiating intellectual
property (IP) provisions in bilateral trade agreements that restrict the use of
TRIPS flexibilities, and by threatening countries using the flexibilities.
2.
Refrain from punishing or threatening trade partners from using TRIPS
flexibilities to advance public health objectives.
Earlier this year, the U.S. Trade
Representative (USTR) cited Thailand's lawful issuance of compulsory licenses
for three important, high-priced drugs as a reason to place the country on the
Special 301 Priority Watch list. Special 301 is an annual review of trading
partners' intellectual property rules that highlights those countries deemed to
deny adequate protection for patents, copyright, trademarks, and other forms of
intellectual property (IP). Thailand issued compulsory licenses for government
use of two important HIV/AIDS medicines and on a heart disease drug. The
government issued a very detailed rationale for its actions, explaining 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 will enable it to provide access to the drug to an additional 20,000
people; the initial price reductions for the generic versions of
lopinavir/ritonavir will enable the country to quadruple the number of people
receiving this lifesaving drug; and the price reduction for clopidogrel enable
Thailand to provide it in the public sector. The brand-name companies retain
monopolies for sale in the private sector, which treats richer Thais and
medical tourists.
USTR also complained in Brazil's
Special 301 listing that the country was considering a lawful compulsory
license (which it has since issued). Brazil's initiative is a crucial step to
help the country maintain its world-class program to treat people with
HIV/AIDS, the viability of which is threatened by high brand-name prices for
second-generation drugs.
Brazil and Thailand's actions are
supported by UNAIDS, Doctors Without Borders, President Clinton and several
other public health and international development experts.
The American people also strongly
support these policy directions. In a nationwide June 2007 poll of 2246 adults
(conducted by the Wall Street Journal-Harris Interactive), 61% of Americans
supported the use of compulsory licensing if it enabled developing countries to
treat more patients, while only 20% were opposed.
USTR has also cited many countries
on the watch list for not providing monopolies ("data exclusivity")
for use of clinical test data generated by brand-name pharmaceutical companies.
3. Refrain from seeking intellectual property
measures more stringent than those provided for in TRIPS.
In a series of bilateral and
regional agreements, the United States has pressured countries, including very
poor nations, to adopt stringent patent and related IP rules -- far beyond what
is required under TRIPS -- that slow the introduction of generic competition.
These "TRIPS-plus"
measures include:
* Restrictions on the
circumstances under which countries are permitted to issue compulsory licenses;
* Patent extensions to offset
delays in the grant of patents or regulatory approval;
* "Linkage" provisions,
which prevent drug regulatory agencies from granting marketing approval to
generics if a brand-name company merely claims a patent -- a much abused system
even in the United States, which has far greater capacity to stem abuses;
* Data exclusivity, which can
impose effective prohibitions on compulsory licensing for a period of up to 10
years after a product has been placed on the market, and which grants
monopolies for brand-name drugs that are not able to obtain patent protection.
4.
Support new global norms for promoting medical research and development
that would address a needs-driven health agenda.
The rationale for promoted
extended monopolies to brand-name drug companies is the need to incentivize
R&D and ensure that countries contribute their fair share to the cost of
R&D for new drugs.
The resolutions emphasize the
importance of R&D, the reality that R&D is relatively expensive, and
the need for trading partners to contribute to R&D costs.
But there are serious flaws with
the existing global system to support medical research and development. Research money is not directed to
priority health needs in the current system. The products that are invented are
frequently priced so high as to burden public and private health insurers, and
to deny access to many individuals in the United States and to huge numbers in
developing countries who must pay for drugs out of pocket. It is in this
context that the call has emerged for new global norms for supporting medical
R&D. These norms would not represent a commitment to a new binding law, but
movement towards a new understanding of what is required to resolve global
public health concerns that are not being addressed by the current market-based
R&D model.
The resolution thus urges the United
States to explore ideas such as prizes for R&D on neglected diseases, or
many other possible ways to direct substantial funding to health-driven R&D
by means other than charging sick people exorbitant prices for drugs. The
resolution is not calling for the elimination of the patent system. Other
methods of innovation can exist alongside the current model. With U.S.
involvement, the World Health Organization’s Intergovernmental Working Group on
Public Health, Innovation and Intellectual Property (IGWG) is currently developing a strategy and plan of action to
begin address the fact that R&D often fails to address the needs of
developing countries. The United States should engage meaningfully with the
IGWG process and participate in the development of methods to promote
needs-driven R&D.
Brand-name pharmaceutical
companies and public health advocates are beginning to embrace the idea of
alternative approaches to R&D such as a prize fund for neglected diseases.
The drug companies recognize that the monopolies conferred by patents are of
little value for patient populations that have minimal purchasing power. Health
advocates are enthused about a system that supports new product development for
neglected diseases and ensures that the resulting products are available at the
most affordable prices possible.
--
The United States has
systematically violated its Doha commitments and undermined the ability of
developing countries to promote access to medicines amongst their poor
populations. The majority of the world’s people cannot afford to purchase
brand-name medicines; the introduction of much cheaper generics by using the
TRIPS flexibilities will help save lives. At the same time, new approaches to
medical R&D are needed in order to spur innovation that will meet priority
health needs. S.Res. 241/H.Res 525 [Resolution numbers may change soon] aims to
make the public health principles of innovation and access the governing
feature of U.S. trade policy -- not as a balancing act, but through promoting IP
rules that affirm and advance both goals.
For more information contact: Sarah Rimmington at
srimmington@essentialinformation.org or (202) 387-8030