CPTech Hosts Post-Election FTA Strategy Session

by Ben Krohmal

Last Thursday at CPTech a packed audience and 8 panelists discussed strategies for addressing the access to medicine implications of bilateral free trade agreements (FTAs) between the U.S. and other countries. Each panelist gave a short presentation:

• Oxfam's strategy to influence FTA agreements includes the production of empirical research on the impact of past agreements. Rohit Malpani of Oxfam America (presentation) presented findings indicating that the U.S.-Jordan FTA, which is frequently touted as a success story, has had a negative impact on access to medicine in Jordan. Rohit also discussed FTA “side letters” that affirm the continued applicability of TRIPS flexibilities, but which only represent an “understanding” that may not be legally binding. Rohit expressed concern that side letters may be regarded by otherwise sympathetic legislators as an adequate substitute for including protections in the language of FTAs themselves.

• Fabiana Jorge of MFJ International (presentation) proposed backing legislation to require that U.S. FTAs honor all intellectual property flexibilities in U.S. law that protect the interests of consumers. She stressed that this legislation would not only increase access to medicines for patients abroad but would also protect Americans from losing current legal protections.

• Gaelle Krikorian of CRESP (presentation) illustrated the trend in FTA’s towards imposing more limitations on access to medicine and described conditions that stand in the way of reversing this trend. Gaelle expressed optimism over growing organized movements in opposition to FTA’s and suggested that those concerned about access to medicine do more to present data on the impact of FTA’s.

• While maintaining that the best policy is to avoid TRIPS+ FTA’s in the first place, Brook Baker of Health GAP (presentation) discussed methods for improving the implementation of bilateral FTA’s already in effect. Brook reviewed considerations supporting more favorable interpretations of FTA texts including language in the Trade Promotion Authority Act (TPA), FTA side letters, and USTR letters to members of Congress. Brook suggested that U.S. FTA partners should waive data exclusivity and linkage requirements to test the authority of side letters and the sincerity of USTR’s reassurances about them.

• Matthew Kavanagh of Global Justice described strategies for mobilizing FTA activism. Matthew suggested orienting a campaign around the likely expiration of TPA and stressed ways in which American interests are affected by access to medicine in other countries.

• Asia Russell of Health GAP discussed global FTA activism and the need to raise awareness about FTA’s and access to medicine among public officials who often fail to realize that FTA’s raise concerns beyond labor and the environment. Asia proposed a “name and shame” list of legislators rated according to their voting record on access to medicines, and suggested pushing for greater transparency and inclusiveness in the FTA negotiating process.

• Rob Weissman of Essential Action argued that ensuring that TPA is not renewed should be the number one priority of groups concerned about FTA’s and access to medicine. Rob agreed with CPTech that health activists should consider compromises on the issue of test data, and to ask USTR and Congress to consider remuneration for test data an alternative to exclusive rights.

• Jamie Love of CPTech said that that intellectual property and pharmaceutical pricing norms are the USTR's primary interest in implementing FTAs, and that some TRIPS+ provisions are likely inevitable. Rather than demanding no TRIPS+ provisions in FTAs, a strategy that has failed in every FTA negotiation so far, Jamie argued that NGO’s should tolerate some comprises; For example, provisions requiring remuneration for test data in lieu of exclusive rights. Jamie argued that this stance would be more acceptable than “no TRIPS+” to a Congress concerned about other countries free riding on U.S. R&D. He suggested that NGOs attack exclusive rights to test data on the grounds that these provisions require the unethical repetition of human clinical trials. CPTech also suggested NGOs target the Korea FTA negotiations, on the grounds that USTR was seeking to outlaw mechanisms in Korea that were needed in the United States to deal with high drug prices (such as positive lists, variable reimbursements, etc). CPTech expressed frustration with the lack of NGO support for new trade paradigms based upon support for R&D rather than IPR and asked groups to be more forward looking and pro-active in thinking about global trade policy. Jamie also called attention to the new WHO Intergovernmental Working Group process, which begins December 4.

Important issues were also raised in the course of discussion following the presentations. Democratic staffers and other discussants said that Democratic control of both houses of Congress offered some opportunities, but would not necessarily result in a large shift in policy. The electoral defeat of two Republican representatives responsible for championing parallel trade legislation is further cause for NGO’s to curb their enthusiasm. "Don't expect much," said one staffer. Considerable discussion was also devoted to the impact of IP/Drug pricing chapters of FTAs on the American state governments. Some suggested that states might offer support for reining in provisions of FTAs that limit the ability of states to negotiate drug prices or choose a partial list of available drugs to subsidize. Other strategic issues were raised and discussed off the record.

Eight civil society views on Doha plus five

by James Packard Love

Eight persons who follow negotiations over the TRIPS provided these brief views on Doha plus five. My favorite is the one by Sir John Sulston. jl

John Sulston FRS, 2002 Nobel Laureate in Physiology or Medicine

The WTO negotiations over TRIPS are worthy of Joseph Heller - just one damned catch after another.

Celine Charveriat, Oxfam International

The Doha Declaration said all the right things but to date has delivered virtually nothing to poor patients. We've gone backwards in five years. The US and the pharmaceutical industry are actively challenging any developing country that has tried to assert its rights and interpret global intellectual property laws in order to protect public health. The declaration will be worthless for poor patients in developing countries until rich countries match their rhetoric with action.

Mira Shiva, People’s Health Movement (PHM)

The Doha Declaration on Trips & Public health was brought about because of public health concerns expressed by developing countries & civil society . We have in the last 5 years witnessed the unwillingness to genuinely implement the flexibilities, we have witnessed the creation of new hurdles , the NON REVEIW of TRIPS , the seduction or arm-twisting of developing countries to sign TRIPS PLUS & many other biased trade measures through regional & bilateral FTA's in the name of greater trade & economic growth . We watch with pain the increasing inequities & worsening of the health & life of millions WHICH IS NOT ACCEPTABLE .

K Balasubramaniam, Health Action International Asia-Pacific (HAI-AP)

There is an urgent need for a clear sign of political will to give precedence to public health interests over commercial interests, This is nowhere to be seen. The clock is running out.

Dalindyebo Shabalala, Centre for International Environmental Law (CIEL)

The Doha Declaration was a major step forward as a statement of principle. Whether the implementation of the declaration, both in the 2005 amendment to TRIPS, and in the slowly growing application of national laws, will reflect that broad spirit is very much in doubt. The data are not yet in. However, we do have one guide -- the old maxim, "Garbage in, garbage out." A restrictive implementation will lead to restricted health outcomes. Only an approach that focuses on the delivery of better health outcomes rather than the protection of profit margins can accomplish what the spirit of the declaration intended.

Colleen Daniels, Health Action International Europe (HAI Europe)

In 2001, after the Doha Declaration was signed, Ambassador B.G. Chidyausiku, of Zimbabwe , asked the questions: "… how do we make it effective? How do we make it deliver the medicines to the people? How do we avoid this declaration ending up as a dead letter?" Today, the answer is that the Doha Declaration was not effective in implementation, it did not deliver medicines to the people and it seems as if it is indeed a 'dead letter.' Now we can only hope that the WHO Intergovernmental Working Group on R&D can finally make the necessary changes to a system that is broken.

Sangeeta Shashikant, Third World Network (TWN)

Five years since the Doha Declaration on TRIPS and Public Health, there is little to celebrate. The problem of access to affordable medicines continues. Although a few developing countries have used the flexibilities available since Doha, pressure from some developed countries and multinational pharmaceutical companies to not make use of these flexibilities or to adopt rules that go beyond the TRIPS Agreement is now more stronger and as a result undermining the Doha Declaration

James Love, Consumer Project on Technology (CPTech)

The 2001 negotiation was a good moment for the global trading system and for public health. The 2003 negotiations were a bad moment, giving us a cynical agreement that was designed to do as little as possible, in real life. But the 2001 agreement is still the more important -- it provide a basis and a mandate to protect access to medicine for all. For this to be achieved, we have to move to new paradigms for the management of intellectual property rights, and the support of R&D. Most important, we need to break the link between drug prices and R&D incentives. This is now possible, but we have to make it happen.

For CPTech's longer statement, see this.

To see what some of the same groups said 5 years ago when the Doha Declaration was promulgated please see this link:

http://www.cptech.org/ip/wto/doha/ngos11132001.html

CPTech statement on Doha plus five

by James Packard Love

This is the statement presented today on behalf of CPTech by Thirukumaran Balasubramaniam, at a meeting in Geneva hosted by MSF to evaluate the first five years of hte Doha Declaration.

Doha + Five
The Doha Declaration on the TRIPS Agreement and Public Health, after five years

Consumer Project on Technology
November 14, 2006

I. The 2001 Doha negotiation

The World Trade Organization (WTO) adopted the Doha Declaration on the TRIPS Agreement and Public Health on November 14, 2001.

It most importantly stated, “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.1

The Declaration was relatively short -- 553 words for the English version, split into seven paragraphs. It was both a political statement, supporting access to medicine for all, and a decision that addressed substantive issues in furtherance of that goal. The specifics were at the end of the Declaration.

Paragraph 5 set out "clarifications" regarding the flexibilities of the TRIPS in the areas of compulsory licensing and parallel trade, eliminating doubts about the freedom of countries to choose the grounds for compulsory licenses. The compulsory licensing fast-tract procedures for emergencies were plainly extended to include cases involving short or long term public health crisis. The WTO would only regulate parallel trade in the area of most favoured nation (MFN) status, or national treatment.

Paragraph 6, the weakest part of the Declaration, called upon the WTO's Council for TRIPS to find an expeditious "solution" to the problems facing countries with "insufficient or no manufacturing capacities in the pharmaceutical sector," when seeking to make effective use of compulsory licensing under TRIPS Agreement. This issue, which was often poorly understood and reported, would later become the subject of prolonged and sometimes treacherous negotiations, which in the end, provided a controversial and disappointing outcome.

Paragraph 7 of the Declaration gave least developing countries the right to eliminate pharmaceutical product patents or protections of pharmaceutical test data at least until 2016.

By singling out public health, and in particular pharmaceuticals, from other trade related issues, the Doha Declaration recognized that medicines are not just another commodity and may be differentiated from other inventions in order to protect public health, regardless of language in Article 27 of the TRIPS, regarding discrimination by field of technology.

II. Negotiations on paragraph 6 of the Doha Declaration

The negotiation over the implementation of paragraph 6 of the Doha Declaration was a major test for the WTO, that it largely failed. As noted by many experts, the WTO decision of 30 August 2003 was protectionist (it allows countries to participate as exporters, while blocking imports), complex, and poorly designed to exploit economies of scale and other efficiencies. It could have been worst. In 2002, the WTO considered limiting the decision to only a handful of diseases -- an irrational and morally repugnant result.

The 2005 WTO decision implementing the 2003 Decision and permanently amending the TRIPS Agreement was more than 2,300 words, including 1,616 words for a new article 31bis for the TRIPS. It is further marred by a restrictive 2003 Chairman's statement of 976 words.

A much shorter and simpler outcome was possible. For example, on October 23, 2002, the European Parliament adopted Amendment 196, in an effort to update the EU Directive 2001/83/EC relating to medicinal products for human use. This Amendment sought to address the paragraph 6 solution in only 51 words:2

"Manufacturing shall be allowed if the medicinal product is intended for export to a third country that has issued a compulsory license for that product, or where a patent is not in force and if there is a request to that effect of the competent public health authorities of that country."

The shorter solution was rejected by DG-Trade and USTR for the simple reason that it would have worked. While DG-Trade and USTR had endlessly advertised to an uncritical press that they were seeking to help the poor, this was clearly not the case.

Some of the flaws in the TRIPS amendment should be highlighted. The fact that it bars imports to nearly all high income countries is absurd, given the fact that these countries have already faced a potential crisis of inadequate capacity to manufacture medicines needed for public health emergencies twice since 2001 -- once for possible treatments for biochemical attacks, and again for treatments for a possible bird flu pandemic. The protectionist nature of the "solution" of paragraph 6 was designed to ensure that Indian generic suppliers could not export medicines to high-income countries under this mechanism -- a result that undermines economies of scale for developing country (but not high income country)’s producers, and ultimately makes consumers in both high and low income countries worst off.

That said, the WTO's amendment to the TRIPS Agreement did create some new space for permitting exports of medicines, when manufactured under a compulsory license.

III. National implementation of paragraph 6 of the Doha Declaration

The response by WTO members to implement this new flexibility has been quite uneven. Among the worst approaches to implementing the new mechanism are those found in Canada and the European Union. Often overlooked, but certainly the best implementation, is the mandatory compulsory licensing for export approach adopted by India, in February 2005.3

It is ultimately too early to judge the utility of the new Article 31bis of the TRIPS Agreement. The reason that there have been few efforts to use the provision is obvious. Few important medicines are now patented in India. As a consequence, importers have not had to rely upon the new paragraph 6 mechanisms -- yet. Over time, paragraph 6 may or may not become more important, depending upon the willingness of countries to issue import licenses, and the extend to which exporting countries rely upon other exporting mechanisms, such as Articles 6, 30, 31.k and 40 of the TRIPS Agreement, Paragraph 7 of the Doha Declaration, or the ability of countries without relevant patents (including non-WTO members) to ramp up export capacity.

As India’s implementation has show, those countries that use the new paragraph 6 mechanisms to promote exports can make it nearly automatic, if they want to. Poor implementation of Article 31bis is not entirely the fault of the WTO.

For non-LDC WTO members, the leading alternative to Article 31bis, are compulsory licenses that use TRIPS Articles 31.k and 40. The use of TRIPS provisions on remedies to anticompetitive practices, which can include simple refusals to license, are objectively much better mechanisms for authorizing exports -- a fact often overlooked by technical assistance experts.

IV. National implementation of paragraph 7 of the Doha Declaration

One of the largest disappointments has been the failure of LDCs or technical assistance agencies, like the WTO, WIPO or WHO, to promote implementation of paragraph 7 of the Doha Declaration. The major benefit of this provision so far has been the decisions by donors, such as the Global Fund, to effectively ignore patents in LDCs, or to accept compulsory licenses issued under questionable procedures. This solution is unsatisfactory in the long run, however.

V. National implementation of paragraph 4 of the Doha Declaration

Since 2001, a number of developing countries have issued compulsory licenses on patents for a handful of AIDS drugs. These include South Africa (2003, as remedy to anticompetitive practices), Zambia, Zimbabwe, Ghana, Malaysia, Indonesia, and Swaziland, to name only some examples. However, countries still struggle with compulsory licensing, for a variety of reasons, including lack of experience, uncertainly over procedures and remuneration, bad national laws, fears of backlashes from investors or trading partners, or corruption.

National laws still often fail to fully exploit the flexibilities of the TRIPS Agreement. None of the UN agencies dealing with technical assistance have provided optimal models for statutes on compulsory licensing in lower income countries. The WHO is woefully under-resourced for providing technical assistance, and in several cases has pressured its own staff when they have attempted to provide public health perspectives on intellectual property right issues, leading to speculation that large pharmaceutical companies exercise undue influence at the WHO.

VI. New paradigms for implementation of paragraph 4 of the Doha Declaration

National governments, UN agencies, development experts, donors, health activists and others need to consider new mechanisms for collective management of intellectual property rights, such as regional or global pools for patents on essential medicines. These patent pools can help countries address many of the problems associated with compulsory licensing. For example, patent pools can:

1. reduce transaction costs and develop the capacity to deal with legal, management and administrative issues associated with voluntary and non-voluntary licensing of patents,
2. provide for greater economies of scale for generic suppliers,
3. protect countries from political pressures, as the pool creates regional or global norms for licensing, and
4. insure that compulsory licensing will follow best practice models on issues such as remuneration, transparency, competition (open licensing), and drug quality (licensing only to qualified suppliers).

Additional attention should be given to the proposals for new paradigms to support medical R&D, including for example the medical innovation prize fund approach (such as United States proposed bill H.R 417 from the 109th Congress), or related systems to reward positive health care outcomes for development of products that treat Type II or III diseases, and global R&D treaties -- ideas that will be will be considered by the new WHO intergovernmental working group (IGWG), which first organizes on December 4-8, 2006.

Ultimately the most important paradigm shift will be to break the link between medical R&D and drug prices. Only then can the promise of the 2001 Doha Declaration reach its potential.

Footnotes:

1 WT/MIN(01)/DEC/2, Declaration on the TRIPS agreement and public health, 20 November 2001, Paragraph 4.

2 See 2002 Civil Society letter to Commissioner Lamy and Ambassador Zoellick on the European position: http://www.tacd.org/cgi-bin/db.cgi?config=admin/docs.cfg&id=178

3 Insertion of new section 92A to the Indian Patent Law - Compulsory licence for export of patented pharmaceutical products in certain exceptional circumstances. "After section 92 of the principal Act, the following section shall be inserted, namely:— 92A. (1) Compulsory licence shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory licence has been granted by such country or such country has, by notification or otherwise, allowed importation of the patented pharmaceutical products from India. (2) The Controller shall, on receipt of an application in the prescribed manner, grant a compulsory licence solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as may be specified and published by him. (3) The provisions of sub-sections (1) and (2) shall be without prejudice to the extent to which pharmaceutical products produced under a compulsory licence can be exported under any other provision of this Act. Explanation.—For the purposes of this section, "pharmaceutical products" means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use."

Noah on GATT Article 24, and goods in transit

by James Packard Love

Ben Krohmal has posted a blog about a presentation by Noah Novogrodsky at a CPTech brown bag lunch event. Noah gave some background on the Canadian C9 problems, and on a CL effort in Ghana for HIV drugs. The novel part of Noah's presentation concerned his assertion that Article 24 of the 1947 Gatt could be somehow used to permit cross-border trade in medicines that one country had obtained or manufactured under a compulsory license. Noah seemed to be implying that the TRIPS rules would somehow not apply, but it was not clear why. Does anyone have any thoughts on this?

About two weeks ago Brook Baker from Health Gap gave a talk in Trinidad, where he mentioned in passing something about exceptions to patent rights for goods in transit. This is something that would be worth thinking about more. Goods in transit have a special status in the Paris convention, and also in the TRIPS, as indicated by the following footnote to Article 51 of the TRIPS:

SECTION 4: SPECIAL REQUIREMENTS RELATED TO BORDER MEASURES

Article 51: Suspension of Release by Customs Authorities

[this relates to of counterfeit trademark, pirated copyright goods, or "other infringements of intellectual property rights"]

Footnote 13: "It is understood that there shall be no obligation to apply such procedures to imports of goods put on the market in another country by or with the consent of the right holder, or to goods in transit."

Note that "goods in transit" are distinct from goods put on the market "by or with the consent of the right holder."