Patents
and Pharmaceutical Access
By
Sanjay Basu
Znet
30 May, 2003
The 56th World
Health Assembly--the annual health meeting at which the World Health
Organization's (WHO) directives are set for the year--ended this week
in Geneva after a long round of discussions on the continuing SARS saga.
Press coverage of the Assembly also focused on the completion of a tobacco
control resolution, which the U.S. delegation agreed to sign in exchange
for deals that will secure a future pact on sugar imports. But the resolution
receiving the longest debate among the delegates of the 192 member governments
attending the WHO's Assembly received little attention outside of the
business press (1, 2).
The controversy was over
a resolution mandating the WHO to advise governments about patent rules
and access to medicines. Patent laws in many developing countries are
now set through a combination of World Trade Organization (WTO) directives,
World Intellectual Property Organization (WIPO) advice, and U.S. bilateral
trade pressure (3). But because the WTO's Trade-Related Aspects of Intellectual
Property Rights (TRIPS) Agreement requires developing countries to pass
national legislation guaranteeing patent terms of two decades for pharmaceuticals,
the prices of new drugs for both common and rare conditions is expected
to double soon after January 2005 (2). The TRIPS Agreement, passed more
than a decade ago under the aegis of the WTO, was described as a "free
trade" measure by its key architect, Pfizer CEO (and Ronald Reagan
trade advisor) Edmund Pratt (4). By definition, it is the complete opposite
of competition-based trade: it grants pharmaceutical companies a monopoly
on any new product they produce, and therefore allows drug prices to
be set to the purchasing standards of the elite, to the obvious detriment
of the poor.
After the anthrax scare over
a year ago in Washington, Senators were threatening the Bayer pharmaceutical
corporation if the company didn't come up with enough ciprofloxacin
(Cipro, an antibiotic used to treat anthrax infection) to protect national
public health (5). The threat was to produce generic versions of Cipro
instead of contracting Bayer; generic contracting would have speeded
the process of drug production and allowed multiple producers to compete
for government contracts, lowering prices for the product as competition
often does.
The irony of the event was
not lost on developing country trade ministers. For years, trade ministers
and their health ministry colleagues had been trying to contract generic
AIDS drug producers under the very same premise--to make manufacturers
compete with one another and therefore lower the price of antiretroviral
drugs and expand their coverage to those most in need. Thailand, Brazil,
and South Africa, among others, faced U.S. trade sanction threats when
attempting such programs (6). But once the U.S. itself was faced with
an "epidemic" of anthrax, the developing country trade ministers
had a tool for bargaining.
At the November 2001 Doha
ministerial conference of the WTO, developing country ministers (while
bullied into signing a number of bad deals) managed to force through
a consensus statement called the Doha Declaration on TRIPS and Public
Health (7). The Agreement reaffirmed safety measures already present
in the TRIPS Agreement--including measures that allowed countries like
Thailand, South Africa and Brazil to produce drugs when the prices of
patented medicines were out of reach (rendering the U.S. actions against
those countries a violation of WTO rules). But in paragraph 6 of the
Doha Declaration, the ministers also included a key statement that countries
too poor to have their own drug manufacturing capacity (which includes
most least developed countries, those with the highest burdens of disease)
could import generics. TRIPS rules, ironically, prevent the exportation
of generic drugs, so this paragraph of the Doha Declaration would allow
for wealthier countries to produce generic drugs for least developed
countries, not just for themselves.
The simple measure appeared
to be quite straightforward at the time--but during the drafting of
its implementing text in December 2002, the U.S. Trade Representative
(USTR) Mr. Robert Zoellick became the only member of the WTO (reportedly
under direct White House pressure) to prevent the execution of the deal
in its stated form (8). Although he had already signed his name to the
Doha Declaration, the USTR would only agree to allow the implementation
if most developing countries with manufacturing capacity were excluded
from exporting and if complex legal mechanisms were constructed that
would effectively prevent any least developed country from actually
being able to import generic medicines; it would also limit any sort
of importation to a short list of diseases for which there are currently
no drugs or only old medicines off patent (9). The revised deal would
effectively secure the continuing global drug price monopoly for the
U.S. industry. The industry ties were not covert--at the World Economic
Forum in Davos, the Pfizer Corporation announced to the business press
that it had taken over the negotiating seat from the USTR and was directly
negotiating with the WTO council (10). The talks on implementation were
deadlocked as Pfizer and other companies intervened--and the discussion
may continue to be deadlocked until (and possibly beyond) the Cancun
ministerial conference of the WTO this September.
At the WHO Assembly this
past week, developing countries wanted to address the issue and allow
the world's top health institution to discuss the health implications
of the USTR's "revised" proposal. At the top of a long list
of ironies is the fact that the USTR's list of diseases for which generic
drugs can be produced excludes the severe acute respiratory syndrome
(SARS)--which, of course, didn't exist publicly until after the USTR
had produced his list. This highlights the importance of keeping the
Doha Declaration in its original form--whereby country health ministries
can tackle an epidemic as it occurs rather than waiting for their populations
to die and spread the disease to wealthier nations which have the generic
manufacturing capacity to actually control it (and this is particularly
important in the case of SARS, for which genome components and potential
therapeutic agents are already being patented, 11, 12). The USTR's revised
proposal would also produce mechanisms that would prevent countries
like Korea and the Philippines from producing drugs (let alone Canada
and China, hit by SARS)--effectively preventing their industries from
being able to build themselves to a level that would offer competition
to the U.S. industry--because they supposedly have some form of manufacturing
capacity. The problem is that public health authorities need the ability
to produce drugs cheaply and quickly; neither Korean nor Pilipino production
facilities are adequate to produce drugs for many syndromes, and as
a result the hundreds of chronic myeloid leukemia patients in South
Korea protesting for access to the drug Glivec (produced by Novartis
and sold at OECD prices in that country) are simply being told to go
home and die (13). Meanwhile, the USTR is circumventing the WTO altogether
by proposing bilateral trade agreements with a number of countries who
are bullied into producing strong patent laws in excess of those agreed
to under the TRIPS Agreement, in exchange for bribing the wealthier
sectors of those countries with tariff and export deals (see, for example,
the recent controversy in Uganda, 14; a list of the bilateral and multilateral
trade agreements that the U.S. is sponsoring, and their affect on access
to medicines, is available online, 15).
Allowing the WHO to expose
these problems and directly consult developing country governments would
be crucial to preventing patents from further restricting access to
medicines. A Doctors Without Borders report released at the Assembly
revealed that many government ministries are simply granting invalid
patents because their personnel are stretched too thinly to evaluate
applications closely, let alone comb through the legal text of the TRIPS
Agreement in order to determine what public health flexibilities are
available to them (16). The resolution to allow WHO intervention was
produced by Brazil early during the Assembly, but the U.S. delegation
managed to push discussion on it into the second week of the agenda
by extending talks on other issues and continuously delaying meetings
(by, for example, wrongly pontificating during the discussion on AIDS
that HIV poses such a strong threat of infection through breastmilk
that breast milk substitutes should be re-considered for export to developing
countries--a frightening repeat of earlier Nestle-sponsored actions
that have resulted in severe nutritional deficiencies among babies in
poor countries, 17). Because many of the poorest countries cannot afford
to keep their delegates in the expensive Geneva facilities for more
than one week, pushing an item into the second week of the Assembly
agenda effectively prevents developing country delegates from being
present at the voting session on the resolution.
The U.S. also proposed an
alternative resolution, stating that extended patent protection would
help enhance access to medicines in developing countries by motivating
further research and development (R&D, 1). This statement employs
a number of fallacies. It ignores, first of all, that the reason why
research and development on diseases like sleeping sickness and river
blindness is so weak is that the poor, who are the primary victims of
these syndromes, lack purchasing power. They are poor, therefore pharmaceutical
companies cannot make much profit from them. Patenting in poor countries
would make no difference; rather, extending patents into poor countries
would simply aid the U.S.-based pharmaceutical industry to monopolize
the elite sectors of countries facing growing inequality. Brazil, during
the 1970s, banned patents on pharmaceuticals altogether but medicine
importation into the country increased five-fold because of the elite
sector (18). Meanwhile, extending patent protection in the U.S. has
rendered the pharmaceutical so profitable (they have been voted by Fortune
Magazine as the most profitable industry in the world for the 11th year
in a row, 19) that their research and development "motivation"
has nearly dropped off the map. Pfizer, the world's largest company,
developed only one drug from its laboratories over the past five years
(Viagra), while purchasing smaller companies and marketing their products
(for example, note the recent acquisition of Pharmacia, 20). Over half
of the current U.S. market in new pharmaceuticals are "me-too"
drugs, or reformulations of existing medicines, which are re-marketed
after minor modifications (19).
The idea that generic competition
will undermine the industry also ignores all available data. According
to the industry's own tax records (obtained from the Securities and
Exchange Commission), Merck this year spent 13% of its revenue 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 (See Appendix 1). Meanwhile, all of sub-Saharan Africa constitutes
only 1.3% of the pharmaceutical market and the industry spends 0.2%
of its R&D funds on African diseases, meaning that the R&D problem
on "neglected diseases" (neglected by those not suffering
from them, that is) will perpetuate until the market-based ideology
is broken (21). While developed countries represent nearly 90 per cent
of global drug sales, 90 per cent of the 14 million deaths due to infectious
diseases are in developing nations (2). What is clear from these numbers
is that both the R&D problem on diseases which affect primarily
the poor, and the problem of access to drugs because of high price monopoles,
are intimately tied to the current "free trade" agenda.
When Brazil proposed the
beginnings of an alternative to this agenda at the Health Assembly,
calling for the WHO to consult developing countries on the patent issue,
the U.S. dropped its strong patent resolution, primarily because it
had no support from other nations (2). But when the Brazilian resolution
came to the floor this Wednesday, the U.S. delegation again attempted
to undermine it. The delegation refused to agree to the resolution until
all mention of the Doha Declaration was removed, until all mention of
bilateral and multilateral trade agreements was removed (effectively
preventing the WHO Secretariat from consulting governments on their
trade deals, as Assembly resolutions have mandating power), and stripping
the language of "public goods" from paragraphs on the R&D
issue (22).
In spite of the weakening
of the resolution, the text was finally passed, and provides reason
for optimism. First of all, its adoption does allow the new, incoming
Director-General of the WHO to take on the issue more strongly, and
he has taken as a chief initiative the project of expanding access to
antiretroviral medicines to 3 million HIV-positive persons over the
course of five years (a modest project, given that it would reach only
one-twentieth of those currently in need). But the Director-General
is appointing Dr. Jim Yong Kim (Co-director of the progressive health
service group Partners in Health, also run by Dr. Paul Farmer) to be
chief advisor of the "scaling-up" project. Given Dr. Kim's
consistent record of advocacy for and direct service to the poor, and
his continuing and steady criticism of the effects of neoliberalism
on public health, there is much reason for optimism (23). The other
piece of good news is that the Brazilian resolution calls for a new
panel that will construct a framework for the development of drugs for
"neglected diseases" (2).
A new proposal for such a
framework has already been created by James Love of the Consumer Project
on Technology, who is widely considered the top international expert
on this issue (see the copy available online: 24). For those who, due
to the continuing elite nature of these proposals, are left far from
the decision-making rooms in Geneva, there is also a new opportunity
for action. Part of the problem with the current pharmaceutical regime,
after all, is that most of the complex drug development work is not
done through pharmaceutical company labs, but through government-funded
(grant-based) university laboratories, most of which are funded by taxpayers
through the National Institutes of Health. Many of these labs simply
sell their products to companies at very low rates to complete the development
and sometimes the clinical trials on a compound (although the latter
are also often paid for through taxpayer funds). The top five selling
drugs on the U.S. market, for example, had 85% of their R&D conducts
through taxpayer funds (including clinical trials; 19). To change the
nature of university complicity is therefore an essential building-block
to creating an alternative framework for medicine development and distribution.
Such a framework is being built through which universities can participate
in an R&D process that leaves behind the market ideology and moves
into a realm where medicines can once again be considered a public good.
Students are leading the way, and anyone is welcome to join: www.essentialmedicines.org.
What the events of the World
Health Assembly in Geneva demonstrate is that the fight for access to
medicines is far from won at a political level, but that the U.S. is
increasingly alienated from its data-denialist position. Even the EU
appears hesitant to provide support, and so it is crucial that the progress
made at the Assembly not be undermined at the September WTO Ministerial
Conference in Cancun. Along with the agricultural issues currently being
negotiated, the paragraph 6 negotiations must move past the "revised"
USTR framework and refer back to the original Doha Declaration. It is
primarily the task of U.S. citizens to push their government against
its current stance, and the task of EU country citizens to prevent the
European Trade Commissioner (DG-Trade) from propping the U.S. position.
But also key to the process will be strong developing country ministers
like those from South Africa and Mexico, which often support the U.S.
but have the option of siding with Brazil and India at the paragraph
6 negotiations. The procedures at the next conference will almost certainly
exclude poorer countries from gaining much of a voice. "Green-rooming"
practices in particular include such procedures as placing one U.S.
trade office representative after another in a negotiating room to delay
negotiations for days; developing country ministries, of course, can
only afford to send one or two ministers to the WTO meetings, and so
those ministers must either brave a hundred-hour-long meeting, or leave
and revoke their opportunity to vote (25). Such "consensus building"
tactics will surely be deployed in Cancun; it's up to a global community
of citizens to expose them and render them obsolete. The 24,000 lives
lost to preventable and treatable infections everyday are certainly
worth the effort, and the initiatives needed to produce change are already
well underway.
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For further information, see http://www.geocities.com/medicinepolicy
References:
1) Williams, F. US move on drug patents under attack. Financial Times,
23 May 2003.
2) Williams, F. WHO to gain advisory role on pharmaceutical patents.
Financial Times, 28 May 2003.
3) Drahos, P. Bilateralism in Intellectual Property. Oxfam Briefing
Paper: http://www.oxfam.org.uk/policy/papers/bilateral/biltateral.rtf
4) Oxfam UK. Formula for Fairness: patient rights before patent rights.
Oxfam Briefing Paper: http://www.oxfam.org.uk/cutthecost/downloads/pfizer.pdf
5) Reuters. New York Senator Urges U.S. to Purchase Generic Cipro, 10/16/2001
6) Mayne, R. US bullying on drug patents: one year after Doha. Oxfam
Briefing Paper: http://www.oxfam.org.uk/policy/papers/33bullying/33bullying.pdf
7) World Trade Organization. Declaration on the TRIPS Agreement and
Public Health. http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm
8) Elliott, L. & C. Denny. US wrecks cheap drugs deal. Guardian
UK, 21 December 2002. http://www.guardian.co.uk/international/story/0,3604,864071,00.html
9) Doctors Without Borders. Reneging on Doha. Briefing Paper: http://www.accessmed-msf.org/documents/renegingondoha.pdf
10) Forbes. Pfizer's McKinnell says drug patent talks progress. 28 January
2003.
11) McGee, B. Hong Kong, Canada, US scientists file SARS patents. Bloomberg
News, 5 May 2003.
12) Elias, P. Race to Patent SARS Virus Renews Debate. AP, 5 May 2003.
13) http://www.cptech.org/ip/health/gleevec/
14) Mulumba, B. Three firms to supply cheap AIDS drugs. The Monitor
(Kampala), 8 May 2003. 15) http://www.zmag.org/content/showarticle.cfm?SectionID=13&ItemID=3149
16) Doctors Without Borders. Drug patents under the spotlight. Briefing
Paper: http://www.accessmed-msf.org/documents/patents_2003.pdf
17) http://www.babymilkaction.org/
18) Gereffi, G. The Pharmaceutical Industry and Dependency in the Third
World. Princeton: Princeton University Press, 1983.
19) Public Citizen. (2001). Rx R&D Myths: The Case Against the Drug
Industry's R&D "Scare Card". http://www.citizen.org/publications/release.cfm?ID=7065
20) Boseley, S. & N. Pratley. Guardian UK. 24 April 2003. http://www.guardian.co.uk/Print/0,3858,4653957,00.html
21) Pharmaceutical Research and Manufacturers of America, PhRMA Annual
Membership Survey, 2002. http://lists.essential.org/pipermail/ip-health/2003-January/004053.html
22) http://lists.essential.org/pipermail/ip-health/2003-May/004793.html
23) 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.
24) http://www.cptech.org/slides/trips2rips.doc
25) Oh, C. Power politics in the WTO. Focus on the Global South Paper:
http://www.focusweb.org/publications/Books/power-politics-in-the-WTO.pdf